Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

CONTINGENCIES FUND 1992–93

Ordered,

That there be laid before this House Accounts of the Contingencies Fund, 1992–93, showing:—

(1) The Receipts and Payments in connection with the Fund in the year ended 31st March 1993.

(2) The Distribution of the Capital of the Fund at the commencement and close of the year; with the Report of the Comptroller and Auditor General thereon.—[Mr. Arbuthnot.]

Oral Answers to Questions — SOCIAL SECURITY

Maxwell Pensioners

Mr. Dickens: To ask the Secretary of State for Social Security what steps the Government have taken to help Maxwell pensioners.

The Secretary of State for Social Security (Mr. Peter Lilley): We have succeeded in ensuring that all Maxwell pensioners have continued to receive their pensions in full while asset recovery work has progressed.

Mr. Dickens: Will my right hon. Friend congratulate the liquidators and the Mirror Group trustees for recovering £84 million-worth of assets? That is a marvellous help to all the people in their later years who could do without worry, stress and tension. It is a magnificent example of the way in which the Government have worked closely with those two parties to ensure that—as was said in an earlier statement, not what the Minister has just told the House—all existing Maxwell pensioners should now receive their total benefit. That is marvellous.

Madam Speaker: Order. This is Question Time, not statement time.

Mr. Lilley: I entirely endorse the point that my hon. Friend made and will certainly convey his congratulations. We are fully behind Sir Peter Webster, who is working on behalf of the Maxwell pensioners' trust to seek a global settlement of all outstanding issues. That will be very much in the interests of pensioners and we hope that he will succeed.

Mr. Ingram: On 7 June last year, the Under-Secretary of State, in reply to my hon. Friend the Member for Leeds, South (Mr. Gunnell), told the House:

The long-term gap between the Maxwell pension scheme's assets and liabilities"—[Official Report, 7 June 1993; Vol. 226, c. 9.]

Madam Speaker: Order. The hon. Gentleman perhaps did not hear the statement that I made last Thursday. I do not want statements at the Dispatch Box or from the Back Benches. It is Question Time and, therefore, I am seeking brisk questions and brisk answers.

Mr. Ingram: I apologise. Does the Secretary of State agree that last June it was calculated that the gap between assets and liabilities would be less than £100 million? In the light of recent out-of-court statements to the Maxwell pensioners' trust fund, is the Secretary of State now standing by that assessment or has it been readjusted? In the light of the answer that he gave the hon. Member for Littleborough and Saddleworth (Mr. Dickens) is he now saying that all the thousands of Maxwell pensioners will receive their pensions in full as a result of the recent settlements?

Mr. Lilley: I understand the important point that the hon. Member makes. Of course a lot of work remains to be done, especially if a global settlement is to be achieved, or even more if it is not achieved. I understand that the scheme trustees are cautiously optimistic—that can be no more than an assessment on their part—that there is a reasonable chance that all their long-term obligations will ultimately be met if the present progress continues.

Family Credit

Mr. Hargreaves: To ask the Secretary of State for Social Security what recent modifications he has made to family credit.

Dr. Spink: To ask the Secretary of State for Social Security what is the number of families receiving family credit; and how many families were receiving a family income supplement in 1979.

Mrs. Roe: To ask the Secretary of State for Social Security how many awards of family credit have been made since the introduction of the scheme.

The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt): Three for the price of one, for the sake of brevity.
About £4.5 million of awards of family credit have now been made. In September 1993, 515,000 families were receiving family credit, compared with only 78,000 receiving family income supplement in March 1979. In April, we shall streamline the claims process for the self-employed, which will help 70,000 families, and extend the fast-track claims service to those people just starting self-employed work. From October, we are introducing a child care disregard in the in-work benefits, which will make 150,000 working families better off.

Mr. Hargreaves: Can my hon. Friend's reply be interpreted as meaning that we are working, we have worked and we shall continue to work to ensure that those in greatest need receive that benefit?

Mr. Burt: Yes, and the benefit will continue to do its job very well.

Dr. Spink: Will my hon. Friend confirm that the £40 child care disregard in family credit that is to be introduced in October will help 50,000 families back into work and will help 100,000 families who are already in work?

Mr. Burt: Yes, the provision for the child care disregard has been widely welcomed and will indeed help the number of families that my hon. Friend mentioned.

Mrs. Roe: Will my hon. Friend confirm that the family credit case load is more than 500,000—the largest ever—and that the number of awards has increased each year since 1988? Does not that confirm the success of the Government's policy of introducing family credit?

Mr. Burt: Yes, the Government's success in introducing that policy was welcomed only last week in a report from the Policy Studies Institute, which revealed that family credit was a benefit. The recent changes that we have announced in relation to child care will be popular and will help low-income families still further.

Ms Eagle: How can the Minister justify subsidising very low-paying, exploitative employers by using a benefit in that way? Should not we be trying to increase the wages paid by such employers, rather than subsidising them with taxpayers' money?

Mr. Burt: The biggest determinant of family credit is the age and number of children, not any variant in the wages paid.

Invalidity Benefit

Mr. Campbell-Savours: To ask the Secretary of State for Social Security what representations he has received as to the impact of reductions of invalidity benefit on family incomes.

The Minister for Social Security and Disabled People (Mr. Nicholas Scott): We have received a number of representations about our proposals to replace sickness and invalidity benefits with incapacity benefit from April 1995.

Mr. Campbell-Savours: Is not it true that, by the end of next year, the Government will be on course for saving £6 million in west Cumberland alone by the switch from invalidity benefit to incapacity benefit? What measure of the effect on the economy has been made by the Government?

Mr. Scott: In essence, the new arrangements are designed to produce a system to meet the needs of those who are incapable of work because of disability or long-term sickness and that is affordable and sensible, and sensitive to the needs of those who really need help.

Mr. Brandreth: Does my right hon. Friend share the frustration of a constituent of mine who is an invalid on invalidity benefit and who read in The Daily Telegraph today about someone who is also on invalidity benefit but is playing a game of squash three times a week and about someone else on invalidity benefit who plays two rounds of golf a week? Does my right hon. Friend share my concern that the legitimate use of invalidity benefit is still being abused and needs to be examined and that we need not be frightened to acknowledge that fact?

Mr. Scott: I am certain that since invalidity benefit was introduced, the conditions for being able to get it have been

altered and made increasingly flexible. I believe that, with incapacity benefit, we are restoring the original intention of invalidity benefit. We are ensuring that general practitioners are not put under pressure to passport people on to this benefit and that there is an objective medical test of those who should receive it.

Dr. Godman: It is the Government, in the shape of the Department of Social Security, who are abusing the invalidity benefit system. Will the Department reconsider its decision not to pay invalidity benefit to women aged between 60 and 65? Only this morning, I received a letter from a woman who will lose almost £60 because of this harsh, rotten decision. Will the Department reconsider?

Mr. Scott: If the hon. Gentleman will write to me about the particular case he will, as ever, receive an appropriate answer.

Pensioner Incomes

Mr. Roger Evans: To ask the Secretary of State for Social Security what proportion of pensioners had incomes in the lowest fifth of the national income distribution in (a) 1979 and (b) the last year for which figures are available.

Mr. Legg: To ask the Secretary of State for Social Security what proportion of pensioners had incomes in the lowest fifth of the national income distribution in 1979 and in the last year for which figures are available.

Mr. Lilley: In 1979, it was estimated that half of all pensioners had incomes in the lowest fifth of the national income distribution. By 1990–91, the proportion had fallen to less than a third.

Mr. Evans: Do not those welcome statistics show a combination of the effects of low inflation in the 1980s, the spread of occupational pension schemes and the Government's direct action in favour of pensioners in keeping up benefit levels?

Mr. Lilley: My hon. Friend is absolutely right. In 1979, only 77 per cent. of pensioners had additional income on top of state benefits but, in the most recent year for which figures are available, the proportion had risen to 85 per cent.

Mr. Frank Field: Will the Secretary of State now tell the House which poor people occupy the position at the bottom of the income scale once occupied by pensioners?

Mr. Lilley: By and large, of course, the well-being of the population as a whole has increased. However, it is true that pensioners have done disproportionately well. Clearly, there has been a rise in the number of unemployed people, who therefore form a larger proportion of those on low income.

Maxwell Pensions Unit

Mr. Lidington: To ask the Secretary of State for Social Security if he will make a further statement on the work of his Department's Maxwell pensions unit.

The Parliamentary Under-Secretary of State for Social Security (Mr. William Hague): The Maxwell pensions unit continues to work in a variety of ways to


encourage an early resolution to the Maxwell pensions dispute. A speedy settlement must be in everyone's best interests, especially those of the pensioners.

Mr. Lidington: Although I welcome the recent out-of-court settlements, what practical difference are they likely to make to the thousands of pensioners in, for example, staff and works schemes, who are still desperately anxious about their future?

Mr. Hague: The drip-feed funding from the Maxwell pensioners trust will last longer if some of the schemes are able to reduce their calls on the trust. To date, 60 per cent. of trust funding has gone to the Maxwell Communication Corporation works scheme. I hope that, in the light of the settlements, the scheme's trustees will be able to make a substantial reduction in their calls on the trust.

Social Fund

Mrs. Roche: To ask the Secretary of State for Social Security what plans he has to review the position regarding grants and loans from the social fund.

Mr. Scott: Our routine monitoring arrangements for the discretionary social fund already allow us to keep its operation under regular scrutiny.

Mrs. Roche: Will the Minister consider extending the provision for people such as two of my constituents? After many months of unemployment, they have recently managed to obtain casual work, but they cannot afford the fare to travel across London to take up that employment, and they have found that a loan from the social fund is not available.

Mr. Scott: The social fund was not introduced to provide help with travel to work. The Department of Employment has a variety of schemes, including schemes to pay for travel for those who are being interviewed for jobs. It is right that once people are in work—unless they are entitled to family credit in certain circumstances—the responsibility for travel is theirs.

Mr. Willetts: Can my right hon. Friend confirm that every social fund loan repaid is money that is then available to help someone else on income support?

Mr. Scott: It has been a feature of the success of the social fund that the resources can be recycled to help many more people than were helped under any previous scheme.

Mr. Bradley: Does the Minister not realise that his monitoring has led to a crisis in social fund loans? Department of Social Security offices throughout the country report that they can give loans only to people who are in the highest risk category. When will the Minister put more money into the system so that people can be treated fairly, whether they walk through the door at the beginning of the financial year or at the end of it?

Mr. Scott: There has been a substantial increase in the social fund—by 15 per cent. over the past 12 months and by 50 per cent. since April 1991. We have responded to the increased needs of the social fund over that period.

Nursing Homes (Top-up Payments)

Mr. William O'Brien: To ask the Secretary of State for Social Security what representations he has received from voluntary organisations with regard to top-up payments for old people living in private nursing homes; and if he will make a statement.

Mr. Burt: Income support is now given to 281,000 people in residential care and nursing homes at a cost of £2.5 billion, compared with support for just 12,000 at a cost of £10 million in 1979. We have regular contact with voluntary organisations and others on all aspects of the system, including the income support limits, but I have to say that we have received very few recently in relation to top-up payments.

Mr. O'Brien: Obviously, the Minister neglects to answer the question. Is he aware of the fears and anxieties of carers who have been looking after elderly people and who find that their homes could be sold over their heads because of the inhuman approach by his Department to the top-up procedure? When will he accept that hardships will be caused to many of the carers? What does he intend to do about that?

Mr. Burt: With respect, I did answer the hon. Gentleman's question. He asked what representations I had received and I said that we had received very few, especially in relation to the top-up payments. Practically all the limits have increased in real terms since 1985. The limit for people in residential care homes increased by 13 per cent. in real terms and that for those in nursing homes by 36 per cent. between April 1985 and April 1993. We shall, of course, keep the limits very much under review. I shall be happy to receive representations in the manner that the hon. Gentleman mentions at any time.

Mr. Kirkwood: Will the Minister accept that I am surprised that he has had few representations on the matter of top-up, against the background of local authorities now negotiating fees that are higher than nationally set income support levels? Will the Minister agree to see a small delegation, perhaps consisting of the hon. Member for Normanton (Mr. O'Brien), myself and representatives of some voluntary groups associated with the problem, in order further to discuss the matter?

Mr. Burt: I would, without any problems, but I repeat to the hon. Member for Normanton (Mr. O'Brien) and to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) that I saw a group not too long ago. We discussed a range of items, but, since the increase that we have made, we have not received many expressions of concern about that matter. That is because we do not believe that the gap between income support limits and costs is widening.

Mr. John Marshall: Will my hon. Friend confirm that the payments have increased 250 times in cash terms? Does not that underline the commitment of the Government and the hypocrisy of the Opposition?

Mr. Burt: My hon. Friend is absolutely right. He is talking about the £2.5 billion income support expenditure during the currency of the Government, compared with just £10 million in 1979—true evidence of commitment to people properly in need.

Income Support

Mr. Hinchliffe: To ask the Secretary of State for Social Security when he last met representatives of Age Concern to discuss income support payments to older people.

Mr. Hague: My right hon. Friend the Secretary of State for Social Security met representatives of Age Concern last February. I also met Age Concern representatives in July last year.

Mr. Hinchliffe: Is the Minister aware that several voluntary organisations concerned with older people are worried that a number of income support claimants are wrongly placed in residential care and nursing homes? In view of the ombudsman's recent report on Leeds healthcare, what steps are being taken by the Department to review cases independently of people in residential and nursing care homes, to ensure that they actually need that form of care when they receive payments from the Department—people with preserved status?

Mr. Hague: The hon. Gentleman raises an important point. We will certainly study the report that he mentions and other reports on the matter.

Mr. Streeter: Is my hon. Friend aware that what my elderly and retired constituents really want is certainty of income, particularly in these days of very low interest rates? When will the guaranteed income bonds be available, so that my constituents can have the benefit of the granny bonds to which they are looking forward?

Mr. Hague: My hon. Friend raises a matter on which my colleagues in the Treasury are expert—whether the bonds are available shortly or available already.

Pensioner Incomes

Mrs. Angela Knight: To ask the Secretary of State for Social Security what proportion of pensioners now have some other incomes from occupational pensions, savings and state earnings-related pension scheme in addition to basic state pension.

Mr. Lilley: An estimated 84 per cent. of pensioners receive income from savings or an occupational pension, in addition to basic retirement pension. Thirty nine per cent. receive state earnings-related pension in addition to basic retirement pension.

Mrs. Knight: Is my right hon. Friend aware that, although Britain is increasing pensions in accordance with the rate of inflation, the Governments of France, Germany, Italy and Portugal are reducing benefits? Will my right hon. Friend confirm that earnings-related schemes in other European countries mean that low earners receive low pensions, but without the comprehensive network of support that only Britain provides?

Mr. Lilley: My hon. Friend makes a very good point. We have taken care to ensure that pensioners are protected against inflation. This year, of course, we are increasing pensions faster than inflation, to allow people some extra to cope with VAT on fuel, even though the Opposition voted against that measure and that increase. Not one of them voted for it. We in this country are far better off than those in many continental countries, where people face

pensions that are being cut or that are entirely earnings-related and therefore significantly lower than ours for those who were low-earners during their working lives.

Mr. Tony Banks: Is not it a scandal that a large number of people have come out of occupational pension schemes and gone into private pension schemes as a result of the encouragement of, and inducements from, the Government, and have found themselves with pension terms that are much worse than before? What will the Government do about that? The Government are responsible for those people being deceived.

Mr. Lilley: As the hon. Gentleman may know, the Securities and Investments Board issued a statement today on its progress so far in investigating people who have opted out of occupational funds and gone into private pension funds. It has the Government's support in looking at that matter thoroughly and making sure that remedies are applied where they are found to be necessary.

Mr. Ian Taylor: Does my right hon. Friend agree that although the important decision on SERPS was taken some years ago, it will start to apply only at the beginning of the next century? That is why the country needs to think carefully about long-term pension provision—not for people who are about to move to pensions but certainly for people under 40? Is not that exactly what is happening on the continent?

Mr. Lilley: We have improved the position for those over 30 by boosting the rebate for over-30s since April last year. That ensures that it should be attractive for people, even if they are over 30, to opt out of SERPS into private pensions. In accordance with our manifesto commitment, we are considering introducing age-related rebates which will make it equally attractive for people of all ages to opt for private pensions.

Mr. Dewar: Is not the Minister concerned about the atmosphere of scandal that now surrounds the sale of private pensions? Has he studied the figures featured in the Financial Times today which suggest that 60 per cent. of the 5 million people who have taken out private pension cover since 1988 are contributing only the basic SERPS opt-out figure and many of them therefore are likely to be very inadequately provided for on retirement? If he wishes to protect people in private pensions, what does he intend to do about the estimate that, since 1988, between £400 million and £1.3 billion of the money contributed by the taxpayer to encourage the pension provision of those people has been taken in commission? Should not he be acting on that now?

Mr. Lilley: If we had not allowed people the opportunity to opt for private pensions when their firm did not have occupational pensions, many of those 40 per cent. who are making greater provision than they would have had if they had stayed in SERPS would not have done so. I want to see more and more people make additional pension provision over and above the minimum level laid down by SERPS and therefore laid down for those who opt out of SERPS. I am glad to see that one of the leading pension providers, Prudential, believes that 70 per cent. of those taking out personal pensions with that company are now making extra provision over and above the minimum laid down by the state. If the Labour party is against


private, personal and occupational pensions and wants to re-nationalise them, it should tell the pensioners of this country before the next election.

Child Support Agency

Mr. Lord: To ask the Secretary of State for Social Security what further changes he plans in the Child Support Agency rules.

Mr. Burt: We have no current plans for further changes to the scheme. It is important that the recent changes are allowed time to take effect, However, we have always said that we will keep the operation of the Child Support Act 1991 under close scrutiny, and we shall continue to do so.

Mr. Lord: Everyone agrees that fathers should contribute to the upkeep of their children, but there is great dissatisfaction with some aspects of the Child Support Agency. May I ask my hon. Friend to look, as a matter of the greatest urgency, at those cases where fathers have taken on binding legal agreements with their former wives to contribute to their children's upkeep? They have maintained those payments throughout and are now being asked, because of the changes in the rules, to contribute amounts of money that they either simply cannot afford or that, in many cases, will deeply damage their new family arrangements.

Mr. Burt: The impact of the recent changes should be a help in terms of phasing and also reducing some payments made by absent parents. It should not be forgotten that any decrease in payment from an absent parent will have a short or long-term effect on the receipt of money by the parent with care. It was always an intention that levels of maintenance might be raised and previous settlements were looked at very carefully both in the setting up of the Act and more recently by the Select Committee. Indeed, we will keep the operation of the Act under review, as we have made very clear to my hon. Friend, but we want to give the recent changes that we have made some time to have an impact.

Mr. Olner: Is the Minister aware of the double standards of the Child Support Agency? It seems to be chasing responsible fathers who have court orders and are doing everything properly, but it is also saying that it will dispose of such court orders and when there is another low court order for a woman, it will not take action or follow the case through until 1996. Is not that the CSA adopting double standards?

Mr. Burt: No, I do not think so. The Act set out a take-on strategy which means that by law some cases cannot be taken on until 1996. Just before Christmas, I announced that where it was possible to take on some cases before 1996 by application from a parent with care, we would look sympathetically at that—that had not previously been the case and it would be a help.
As to whether we are going after the right people, about half of the cases taken on by the CSA at present involve those who have not paid maintenance before. By the end of this year, we hope that the figure will be up to about two thirds. Some 15,000 people who have been difficult to trace in the past and who might have escaped paying any maintenance altogether have been found by a specialist tracing unit. We are conscious of that particular criticism and we are doing our very best to meet it.

Mr. Matthew Banks: My hon. Friend rightly has drawn attention to the many changes and concessions which have been made, and they have been widely welcomed by hon. Members of all parties. Will he give the House an assurance that he will continue to take a close interest in the operation of the CSA? Unless we stop tinkering and take firm action quickly, many of my constituents and those of other hon. Members—honest, decent and hard-working people—will go bankrupt.

Mr. Burt: I recognise the force with which my hon. Friend speaks. Of course, I keep a careful eye on the cases and the correspondence brought to me. The system carries a great deal of good will because of the change from the previous discretionary system, under which the amount of maintenance paid to women with children was falling to extremely low levels.
We have made a series of changes that should improve the system and we will keep it under review. However, it is important to remember that we do not want to go back to a system that failed to obtain maintenance for women in the past. That meant repeated returns to courts and sometimes the avoidance of responsibility. When we make further changes—if they are needed—they must be carefully considered.

Mr. Barnes: The Minister's initial reply was disappointing. The CSA will be like the poll tax; in that case, one bit of transitional relief was followed by another, before the poll tax was finally scrapped. Should not responsible and respectable parents in second families have their interests taken into account by a further alteration in the measure?

Mr. Burt: I take the hon. Gentleman's point, but my earlier reply suggested how seriously we take the issue and how determined we are to make sure that the system is right. We have made some changes, and we want to make sure that they have an impact, but we will keep the matter under careful review. We all have a vested interest in making sure that there is a good system of child maintenance throughout the UK, and that is not a point at issue between the parties.

Pensioner Households (Assets)

Mr. Heald: To ask the Secretary of State for Social Security what representations he has received about the current value of the assets held by the average pensioner household; and what was the comparable position in real terms in 1978–79.

Mr. Hague: We do not have the information on the capital value of pensioners' assets. However, in 1990–91, the latest year for which figures are available, the estimated average weekly income that pensioners received from their savings or investments was £30.30. The comparable figure for 1979 was £11.20.

Mr. Heald: Will my hon. Friend confirm that, in 1979, 62 per cent. of pensioners had additional income from savings and investments?

Mr. Winnick: Reading.

Mr. Heald: I am not reading. That figure has now risen to 76 per cent. Does my hon. Friend agree that that shows that a partnership between the private and public sectors can lever up standards for pensioners? Will he pay tribute


not only to the financial and pensions industry but to the pensioners who are prepared to make the effort to provide for their retirement in addition to the state provision?

Mr. Hague: My hon. Friend is absolutely right—even without notes. He points to a significant improvement in the opportunity for and the success of pensioners in saving. The proportion of pensioners with income from savings has risen to 76 per cent. That reflects partly an improvement in their incomes over the years and partly the fact that inflation is lower than they experienced in the 1970s.

Mr. Winnick: Has the Minister seen the report today from the Adam Smith Institute which recommends that pensions be abolished, together with all the other features of the welfare state? Does not that report show the hidden agenda of the Tory Government as, time and again, the Adam Smith Institute's recommendations have been brought about by the Government?

Mr. Hague: The abolition of the state pension has been advocated by at least one Opposition Member, and not just by the Adam Smith Institute. We will read the report from the institute with interest, but the Government are engaged in sustaining the welfare state, not in ending it.

Mr. Jessel: Is not the biggest form of pensioners' savings very often the house in which they live? Will my hon. Friend see what can be done to improve the position of the large number of pensioners living in valuable houses who have low incomes?

Mr. Hague: My hon. Friend is right to say that home ownership is an important part of pensioners' assets. Indeed, 94 per cent. of pensioners who own their home own it outright. That has contributed to the general improvement in pensioners' financial position.

Pensions and Income Support

Mr. Alan W. Williams: To ask the Secretary of State for Social Security what has been the percentage change in real terms since 1979 in (a) average earnings, (b) the basic pension for a single person and (c) the level of income support for a single parent with two children.

Mr. Hague: Since 1979, average earnings have increased by 35 per cent. in real terms. In the same period, the basic state retirement pension has risen by 3.2 per cent. in real terms, although the total average income of single pensioners has risen by 39 per cent. in real terms since 1979.
It has been estimated that the level of supplementary benefit or income support for a typical lone parent with two children under five has risen by about 16 per cent. in real terms since 1979. However, direct comparisons between income support and supplementary benefit are difficult to make because the two schemes are very different.

Mr. Williams: Will the Minister comment on the "Social trends" survey figures published last month, which showed that since 1979 the share of national income of the richest fifth of our population has increased from 35 to 43 per cent. but the share of the poorest fifth has dropped from 10 to 6 per cent? Does he agree that the rich get richer and the poor get poorer? We are "back to basics" Tory style.

Mr. Hague: What is important is that since 1979 there has been an increase in income for all groups in society. That is what really matters. For example, the proportion of pensioners in the bottom decile of the income distribution, which was 31 per cent. in 1979, fell to 11 per cent. in 1990. That is a dramatic improvement in pensioners' living standards.

Mr. Jonathan Evans: Has my hon. Friend had time to assess what would have been the effect of success by the 53 Opposition Members who attempted to stop the recent pensions increase?

Mr. Hague: If that vote had been successful, it would have deprived pensioners of several hundreds of millions of pounds of income.

Mr. Rooney: Does the Minister recognise in his manipulation of statistics that 8.25 million people are dependent on income support whereas 3 million were in 1979?

Mr. Hague: Income support did not exist in 1979; there was supplementary benefit. I have compared the level of supplementary benefit as closely as possible to income support now. Income support now is approximately 16 per cent. higher than in 1979. That reflects the commitment of the Government to help people in a difficult position.

Mr. Duncan: Does my hon. Friend accept that it is sensible to increase benefits in line with inflation and not in line with earnings? Has he seen a report that suggests that if we increased benefits with earnings, in the next century we would have to add 17p to the basic rate of income tax to pay for it?

Mr. Hague: My hon. Friend is right to draw attention to the fact that increasing benefits in line with earnings would clearly add many billions to expenditure in future years.

Invalidity Benefit

Mrs. Anne Campbell: To ask the Secretary of State for Social Security how many people he expects to lose entitlement to invalidity benefit as a result of the measures introduced in the November 1993 Budget.

Mr. Scott: We estimate that, as a result of our proposals, an average of 130,000 fewer people will receive long-term incapacity benefit in 1995–96 than would have received invalidity benefit.

Mrs. Campbell: Is the Minister aware that many people who suffer from acute anxiety and depressive illnesses receive income support and that for them a game of squash might be part of the treatment? That is a reference to the hon. Member for City of Chester (Mr. Brandreth). Will the Minister please give some assurances to those people whose worries about the Government's plans are making their depressive illness worse? Will he reassure them that his plans will not reduce their benefits arbitrarily and suddenly?

Mr. Scott: Our clear intention is to ensure that those who are incapable of work through either physical or mental disability receive incapacity benefit and that those who are capable of work receive back-to-work benefits. I


can give the hon. Lady an undertaking that, in the objective medical test, special arrangements will be made to take account of mental incapacity.

Mr. Bates: Will my right hon. Friend reassure my constituents who are existing beneficiaries of invalidity benefit that if they are genuinely incapable of work they will suffer no loss of benefit whatever and that the benefit will retain its tax-free status? Will he reject and condemn the scaremongering of the Labour party that has suggested otherwise?

Mr. Scott: I will give my hon. Friend that assurance. At the point of change to the new system, there will be no cash losers, as long as people are able to pass the new, objective medical test.

Mr. Nicholas Brown: If benefit records are held at the Long Benton complex in my constituency of Newcastle, East, why has the Minister allowed a local manager to purchase 22 Olympic jackets to keep senior management warm, at a cost of more than £300 a jacket? Would not the money have been better spent on—

Madam Speaker: Order. I am surprised at the hon. Gentleman. That matter does not relate to the question.

Unemployment Benefit

Mr. Enright: To ask the Secretary of State for Social Security what is his estimate of the number of people who would lose entitlement to unemployment benefit in the current year if the period of entitlement were reduced from 12 months to six months.

Mr. Burt: It is estimated that a total of 240,000 unemployed people at any one point in time during the current operational year would lose unemployment benefit if the length of entitlement were reduced from one year to six months, although 150,000 would be eligible for income support.

Mr. Enright: Are not the unemployed paying for the incompetence of the Government's financial policies? Will the Minister give an assurance that if—as he and other Ministers are constantly stating—there is an upturn in the economy, he will instantly restore to the unemployed what is surely their right?

Mr. Burt: The Government are giving more practical help and advice than ever before to aid the unemployed to get work. The Employment Service is set to find 5,632 placements in each working day, having placed 1.4 million people in employment in 1992–93. Employment and training programmes are providing opportunities for 1.6 million people, which represents an increase of 50 per cent. on the past financial year. That is a good record.

Oral Answers to Questions — ATTORNEY-GENERAL

Butte Mining

Mr. Morgan: To ask the Attorney-General what consultations he has had with the director of the Serious Fraud Office in relation to the length of time being taken for its inquiries into the flotation of Butte Mining and allied matters.

The Solicitor-General (Sir Derek Spencer): The Serious Fraud Office investigation into the affairs of Butte Mining plc began in June 1992. The matter is complex and the investigation is proceeding as quickly as possible.

Mr. Morgan: Does the hon. and learned Gentleman agree that the fact that for 18 months the Serious Fraud Office has been investigating a south sea bubble affair in the City of London, which occurred almost seven years ago, tends to bring our legal system into disrepute? I am sure that hon. Members on both sides of the House agree that we need to control City fraud. Will the hon. and learned Gentleman assure the House that there is a prospect of the matter coming to some sort of conclusion?

The Solicitor-General: I can assure the hon. Gentleman of that. The matter did not come to light until comparatively recently. As I said, the inquiry began in 1992. It involves inquiries in many foreign jurisdictions. It is a good example of the special skill and powers required to get to the bottom of cases of that nature. I assure the hon. Gentleman that the matter is being pursued rigorously.

Serious Fraud (Trials)

Mr. Ian Bruce: To ask the Attorney-General what is the average time for a serious fraud case to be brought to trial after the accused has been charged.

The Attorney-General (Sir Nicholas Lyell): The average time between acceptance of a case by the Serious Fraud Office and the preparatory hearing which constitutes the start of the trial was 27 months for the year ending April 1992 and 24 months for the year ending April 1993.

Mr. Bruce: I thank my right hon. and learned Friend for that answer. Surely it is intolerable that it has taken so long to bring to trial someone who has been charged and against whom there is already some evidence. Surely it is not in the public interest or that of the accused that that length of time should be taken. How long will it be before the number of months is reduced to a more acceptable level?

The Attorney-General: The reason for setting up the Serious Fraud Office to deal with these complex cases was precisely that given by my hon. Friend—the matters needed to be investigated more expeditiously and efficiently. The length of time that it takes to deal with those complex matters is a great deal shorter than it was before the Serious Fraud Office was set up.

Mr. John Morris: Is the Attorney-General satisfied that the Serious Fraud Office has adequate resources to investigate and proceed with cases expeditiously? Will he look into some of the cases to which much publicity has been given as a result of the delays and into prosecutions involving Ministry of Defence property?

The Attorney-General: Yes, I am satisfied that the Serious Fraud Office has adequate resources. When it has taken on particularly big cases, such as the Bank of Credit and Commerce International and Maxwell, special arrangements for extra resources have been made. I will certainly consider what the right hon. and learned Gentleman said about Ministry of Defence cases, but I have no reason to believe that such cases are unduly prolonged. A number of extremely complex cases—for example, in relation to the North sea—have recently been brought to very satisfactory conclusions.

Sir Ivan Lawrence: Since fraud cases must vary in their complexity and length, surely there is not much point in criticising the average length of time it takes to bring a fraud case to trial. On the other hand, however, is my right hon. and learned Friend aware that the longer a case takes to come to trial, the more likely it is that a company will be destroyed when news of the investigation gets around?

The Attorney-General: My hon. and learned Friend makes a good point, although that news is likely to get around at the beginning rather than at the end of the investigation. That the cases should be dealt with promptly and expeditiously is extremely important.

Mr. Maclennan: Does the Attorney-General accept that, in the average case appearing before the Crown court, it takes 13.7 weeks between committal and trial? Although the matter of fraud is appalling, the average length of a trial is far too long. What is he going to do about that?

The Attorney-General: I am not sure that I agree with the hon. Gentleman. He compares relatively simple cases that appear before a Crown court and large complex cases. If he casts his mind back to the early 1980s, for example, he will find that some large cases from the City of London took five, six or seven years to come forward, whereas the equivalent period now is two, three or four years. Expedition is extremely important. We have made improvements; we must continue to work at it.

Mr. Thurnham: Where the Serious Fraud Office has spent millions of pounds preparing its case, will my right hon. and learned Friend consider appealing against a grossly lenient sentence, such as that imposed on Levitt?

The Attorney-General: I cannot comment on individual cases, but a clause has been tabled to the Criminal Justice and Public Order Bill to give my right hon. and learned Friend the Home Secretary the power to extend the power of the Attorney-General to refer sentences in serious and complex fraud cases.

Asil Nadir

Mr. Skinner: To ask the Attorney-General what recent progress the Serious Fraud Office has made regarding the Asil Nadir case.

The Attorney-General: The Serious Fraud Office is ready to bring Mr. Nadir to trial as soon as he returns to the jurisdiction.

Mr. Skinner: Will the Attorney-General tell us whether the Government, the Serious Fraud Office or he himself have been in negotiation with Asil Nadir's lawyers with a view to trying to get him to plead guilty to one of the lesser charges—as was the case with Levitt—so that he can get off on the more serious charges? Will the right hon. and learned Gentleman give a guarantee to the House today that in no circumstances will he or the Serious Fraud Office allow Asil Nadir to have those charges against him dropped so that he gets a plea on a lesser charge?

The Attorney-General: I know of no such negotiations.

Crown Prosecution Service

Mr. Dickens: To ask the Attorney-General what assessment he has made of the criteria on which the Crown Prosecution Service determines whether to prosecute; and if he will make a statement.

The Solicitor-General: I am satisfied that the criteria in the code for Crown prosecutors which determine whether a prosecution should proceed are sound. But, as my right hon. and learned Friend the Attorney-General announced to the House on 15 December 1993, the Director of Public Prosecutions is currently revising the code so that it may more easily be understood by the police and the public.

Mr. Dickens: Does my hon. and learned Friend agree that we expect the Crown Prosecution Service to act as judge and jury, a halfway house, in deciding whether we should prosecute? In those circumstances, would my hon. and learned Friend have any objection if Members of Parliament approached their local CPS office about a case of particular interest to the local police and the victims?

The Solicitor-General: I should welcome, as I am sure would the CPS, the attendance of any hon. Member who wished to visit his local CPS office. I am sure that such offices would be cheered up immensely at the prospect of a visit by my hon. Friend. Any hon. Member who visits those offices will discover that cases are discontinued only after close liaison with the police. When that happens, it is done in the interests of justice and it is not any criticism of the police.

Mr. Gunnell: To ask the Attorney-General what was the cost of the Crown Prosecution Service in the final year in which it was administered by local government; and what is the percentage difference in real terms, between that figure and its cost in 1992–93.

The Attorney-General: Before 1986, there were no uniform arrangements for the handling of prosecutions and it is not, therefore, possible to make the comparison which the hon. Gentleman requests.

Mr. Gunnell: I am sure that the Attorney-General will find that costs have increased. Does he agree that in West Yorkshire, for example, what has been purchased is a loss of local democracy? Does he also agree that the Police and Magistrates' Courts Bill, which is before the House of Lords, threatens further to erode local democracy and to create great national interference in respect of both the police and the Crown Prosecution Service which may not be in the interests of justice?

The Attorney-General: I do not agree with the hon. Gentleman. Prosecution decisions are not matters for elected members either of Parliament or of local authorities; they must be carried out by independent prosecuting authorities. The hon. Gentleman might care to reflect on the huge release of police time and effort away from the time that they had to spend in the courts prosecuting, giving evidence and providing antecedents in the Crown courts. That has enabled them to become free for much more front-line policing.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

Overseas Aid

Mrs. Roche: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the level of overseas aid.

The Minister of State, Foreign and Commonwealth Office (Mr. Alastair Goodlad): Provision for aid this year is more than £2.1 billion.

Mrs. Roche: Will the Minister explain why his Department appears to ignore its stated policy of giving aid to those countries that have good government and are among the poorest in the world? Instead, it favours countries that are major purchasers of British weapons, such as Malaysia and Indonesia.

Mr. Goodlad: There is no connection whatever between the sale of defence equipment to recipients of aid and the aid programme. The good government criteria which we apply to aid are extremely important, as are the criteria for tackling poverty. Eighty per cent. of our bilateral aid to developing countries was spent in the poorest countries in 1992–93. One of our priority objectives is to help developing countries to design and implement poverty reduction strategies. There is, therefore, no basis whatever for the hon. Lady's allegations.

Mr. Fabricant: Is my hon. Friend aware that, in an analysis of overseas aid, the United Nations said that Britain's overseas aid was equivalent to the sixth highest in the world?

Mr. Goodlad: My hon. Friend is absolutely correct. Britain maintains a substantial aid programme, which is the sixth largest in the world.

Mr. Tom Clarke: Does the Minister recall that the Under-Secretary of State, the hon. Member for Morecambe and Lunesdale (Mr. Lennox-Boyd), who was put up to answer overseas development questions a few weeks ago, assured me
our aid programme is not and will not be linked to arms sales"?—[Official Report, 7 February 1994; Vol. 237, c. 17.]
Is the Minister aware that the Foreign Secretary admitted on Friday that aid and arms were entangled with the negotiation of the arms deal with Malaysia signed in 1988? Has British aid been entangled with the sale of arms on other occasions?

Mr. Goodlad: I repeat that our aid programme is not linked to arms sales. As my right hon. Friend the Foreign Secretary said on 25 January in a written answer to the right hon. Member for Copeland (Dr. Cunningham),
During discussions in 1988 about the proposed memorandum of understanding on defence sales, the Malaysians expressed their wish to make a reference to aid. A protocol was signed during the visit to Kuala Lumpur in March 1988 by the then Defence Secretary, my noble Friend, Lord Younger of Prestwick. This set out the Malaysian Government's intention to buy defence equipment from the United Kingdom, with the details to be elaborated in the later memorandum. The protocol included a reference to 'aid in support of non-military aspects under this programme.'
After consultation with ministerial colleagues in London, the Secretary of State for Defence wrote to the Malaysian Minister of Finance in June 1988 to say that aid could not be linked to defence sales"—

Mr. Campbell-Savours: On a point of order, Madam Speaker.

Madam Speaker: Order. The Minister will know that I have asked for brisk answers to questions. Overseas development has only 10 minutes, so I repeat my request.

Mr. Goodlad: Thank you, Madam Speaker. My right hon. Friend said:
As a result the issue was not taken up in the memorandum of understanding on defence procurement which the British and Malaysian Prime Ministers signed in September 1988, and which did not cover aid. Our aid programme is not linked to arms sales—[Official Report, 25 January 1994; Vol. 236, c. 145–46.]—
however much the Opposition may continue to repeat that it is.

Mr. Simon Hughes: Just to be absolutely clear about this, and so that the Minister cannot be accused of being economical with the actualité, can he tell us whether aid, now or in the past, has ever been entangled with defence and arms sales—yes or no?

Mr. Goodlad: To avoid the risk of being accused of giving excessively long answers, I refer the hon. Gentleman to what I have just said.

Sir Donald Thompson: Does my right hon. Friend agree that all this fuss is seen by business men in my constituency as, at best, humbug and, at worst, cynicism?

Mr. Goodlad: My hon. Friend is right. There is a rich mixture of humbug and cynicism among Opposition Members. They will not tell us whether they are in favour of defence sales, whether they are in favour of the aid and trade provision or whether they are in favour of destroying jobs—so we must assume that they are in favour of the latter.

Lomé Agreement

Mr. Enright: To ask the Secretary of State for Foreign and Commonwealth Affairs what reviews have been conducted on the completion of the first half of the current Lomé agreement; and what conclusions were drawn.

Mr. Goodlad: The fourth Lomé convention included provision for a mid-term review by February 1995. Negotiations with the African, Caribbean and Pacific countries will begin in May.

Mr. Enright: Is it not odd that the start should have been so late? If the Government are going to get down to a hard and proper analysis of what aid is needed, should not they be looking at regional structures in the ACP countries, particularly at the Economic Community of West African States? They should also be looking at education and, perhaps, at monetary union, which those countries, but not the European Council, are discussing.

Mr. Goodlad: The hon. Gentleman makes two important points. The scope for regional co-operation is a unique feature of the Lomé convention. The seventh European development fund includes 1.25 billion ecu for regional co-operation projects. Regional allocations are subject to the same processes as national funds. Programming takes place at the beginning of each EDF. That is likely to be discussed in the negotiations with the ACP countries, which start in May.
Human development, in which education plays a major part, is a stated objective of the convention—one which will be upheld in the mid-term review. The Commission is producing a paper on education policy; it should result in a resolution at the Development Council in November this year.

Mr. John Marshall: Does my right hon. Friend expect that, as part of the review of the Lomé convention, it will be pointed out that British exports to Malaysia trebled after the signing of the Pergau dam deal?

Mr. Goodlad: My hon. Friend is right. Our exports to Malaysia have been extremely healthy; in 1993, they doubled the 1992 figures. I hope that, despite the efforts of the Opposition, they will continue to prosper.

Game Reserves (South Africa)

Mr. Tony Banks: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make assistance available to the South African authorities for the upkeep of that country's game reserves following the impending elections.

Mr. Goodlad: We expect to discuss future priorities for our aid programme with the new Government after the elections.

Mr. Banks: Is the Minister aware that enormous pressures will be put on the new Government of South Africa after the April elections, even if a civil war is avoided? There will be many priorities, but will he give us an assurance, on behalf of animal lovers in this country, that much of the good work that has been done in the South African game reserves will be upheld and that that will be one of the items that the Government will look at sympathetically in terms of aid to South Africa?

Mr. Goodlad: The hon. Gentleman's dedication to animals, especially elephants, is well known, and the importance of game reserves is clear. We have not received

requests on this matter, but we might consider helping conservation projects with clear community benefits. Of course, we support the convention on international trade in endangered species. We spent more than £600,000 on elephant conservation projects in Africa last year. The black and white rhino, as well as the elephant, are flourishing in South Africa, which is a tribute to the game management there. I will certainly draw what the hon. Gentleman has said to the attention of my right hon. Friend.

Somaliland

Mr. Simon Coombs: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on aid to the Republic of Somaliland.

Mr. Goodlad: Since May 1991, Britain has committed £3.8 million-worth of bilateral humanitarian assistance to north-west Somalia.

Mr. Coombs: Will my right hon. Friend join me in paying tribute to organisations such as Action Aid, Oxfam and Save the Children which are doing such excellent aid work in a territory which, after all, was administered by Britain? Can he tell the House what further help might be given to that territory, which is doing its best to re-establish efficient democratic government?

Mr. Goodlad: I readily join my hon. Friend in his tribute to the work of the non-governmental organisations that he mentioned. We are keen to continue support for those organisations. Their assistance to date has helped to re-establish water supplies and human and animal health delivery services, and to support mines clearance work. The increased assistance depends on the existence of a secure environment in which to deliver effective aid. We hope to concentrate future British support for rehabilitation activities in north-west Somalia on police, primary health care and education, but concern remains about the security of people there in the light of recent events.

Levira Foods plc

Mr. Frank Cook: I beg to ask leave to move the Adjournment of the House, under Standing Order. No. 20, for the purpose of discussing a specific and important matter that should have urgent attention, namely,
the passing into receivership of Levira Foods plc at Preston Farm industrial estate in Stockton-on-Tees, Cleveland.
The matter is specific; it relates to a brand new factory, announced by the right hon. Member for Enfield, Southgate (Mr. Portillo), then a Minister of State at the Department of the Environment, two years ago this month. The factory was expected to create 700 new jobs with a further 100 being created in the company's suppliers. It is also specific in that it relates to circumstances causing the lay-off of more than 140 workers last Friday and the further lay-off of the remaining 300-plus early today.
The matter is important because the factory was announced as a specific response to the breach of the Government's four-year promise of relocation of the quality assurance facility at Woolwich to that site—a promise which, on several occasions, had excluded Cleveland from consideration as an alternative position for other governmental functions that were being relocated to the provinces. It was, we were told, the result of the Prime Minister's personal trawl of Ministries to find a replacement for the Woolwich disappointment.
It is important to note that, despite all the foregoing, the hon. Member for Stockton, South (Mr. Devlin) is reported in today's edition of the Evening Gazette as stating:
The business was highly leveraged in the first place,
and that
it has had to be refinanced a couple of times"—
and all in less than two years.
The matter is in need of urgent attention, for the development has already been held directly responsible for the collapse of the construction contractors, Jewitt Builders, due to outstanding bills estimated at £1 million. The House will need to know how much money from the public purse was expended on that abortive scheme. While hon. Members are calculating that, they might also feel the need to assess today's claim from the Teesside development corporation:
It is a remarkable achievement for Levira Foods to have created the most advanced food manufacturing plant in Europe.
It is indeed remarkable that a custom-made unit lies idle so early in its life; remarkable that 500 people starting on a flagship project with so much hope should be compelled to take to the boats quite so quickly; remarkable that such a flagship should be allowed to generate so much debt repeatedly; and remarkable that, after all that, a fellow hon. Member should plead for
a less contentious financial background
so that it might
make a go of it
To my mind, Madam Speaker, all the foregoing facts show clearly that those matters deserve urgently the closest scrutiny of the House—today.

Mr. Tim Devlin: On a point of order, Madam Speaker.

Madam Speaker: Order. I have to respond first. I shall deal with points of order in a moment.
I have listened carefully to what the hon. Member for Stockton, North (Mr. Cook) has said and must give my

decision without giving any reasons. I am afraid that I do not consider the matter that he raised to be appropriate for discussion under Standing Order No. 20 and I cannot, therefore, submit his application to the House.

Several hon. Members: rose—

Madam Speaker: Order. Let me take first a point of order from the hon. Member for Stockton, South (Mr. Devlin), because he was mentioned.

Mr. Devlin: On a point of order, Madam Speaker. May I congratulate you on what I consider to be the right decision?
A temporary cessation of trading has taken place at the factory, which is in my constituency. Unfortunately, I received no notice from the hon. Member for Stockton, North (Mr. Cook) that he was going to raise the matter in the House today. I can say, however, that the Teesside development corporation is taking urgent steps to examine the matter. The present position will not be made clear for a few hours, but, in any event, the Government, who have invested heavily in the factory, have done so quite correctly, as the asset remains available for sale—

Madam Speaker: Order. That is barely a point of order for me. The hon. Gentleman rightly raised a point of order because he had been mentioned, but I cannot allow a debate on a Standing Order No. 20 application that I have just been unable to grant.

Mr. Frank Cook: Further to that point of order, Madam Speaker—

Madam Speaker: There can be no further points of order on that matter.

Mr. Cook: The accusation was made that no notice had been given, Madam Speaker. Notice was given.

Madam Speaker: That has cleared the air very nicely. [Interruption.] Order. I am not seeking to name hon. Members at this point, but, if they have something to discuss, perhaps they will do it outside while we get on with our business.

Points of Order

Dr. John Cunningham: On a point of order, Madam Speaker. Today, unprecedented—indeed, historic—action has been taken by NATO war planes, which have shot down four Bosnian Serb war planes. That action, although authorised by resolutions 781 and 816 of the Security Council of the United Nations, nevertheless represents a serious escalation of events in Bosnia. It has already apparently resulted in an increased bombardment of Tuzla by Bosnian Serbs. We need to know whether the NATO ultimatum will be extended in any way to Tuzla or anywhere else, and whether these events are to be considered by the United Nations Security Council.
The Foreign Secretary has made a statement in Athens; the Secretary of State for Defence has made a statement in Leicester. Is it not unacceptable that the House of Commons has had no opportunity to hear a statement, and to question Ministers on these issues—especially when we bear in mind that Ministers are answering questions on these matters in the House of Lords? Have you, Madam


Speaker, had any indication of the intention of Her Majesty's Government to make a statement about these important events?

Mr. Tony Benn: Further to that point of order, Madam Speaker. As you know, as soon as the news of the shooting down of the aircraft came through, I contacted your office seeking an opportunity to raise the matter this afternoon. Subsequently, I heard the Prime Minister speaking from Washington, the Foreign Secretary speaking from Athens—that was mentioned by my right hon. Friend the Member for Copeland (Dr. Cunningham)—and the Secretary of State for Defence speaking on television. I have also been in another place, and heard a statement volunteered by Ministers. We have, however, heard nothing in the House of Commons.
Every single soldier serving in Bosnia, and every civilian, is represented by a Member of Parliament. The House of Commons, however, has been denied the opportunity to hear a statement by the Government, allowing us to cross-examine them about the escalation of events, the risk to our aid convoys—which have been stopped today because of that risk—the danger to troops and their families, who might also be at risk, and, indeed, the international aspects of the matter.
This is not an affront to the House of Commons, but a denial of the rights of those who look to the House of Commons when seeking explanations from Ministers about actions that may affect their lives and welfare and the future peace of Europe and the world. In the light of that, Madam Speaker, would you be prepared to accept tomorrow a Standing Order No. 20 application that I would have tried to move today, had I not failed to do what must be done in the first instance—that is, obtain a statement by private notice?

Madam Speaker: As hon. Members fully appreciate, a private notice question has to meet certain criteria, one of which is a change of policy. In this case, there has been no change of policy; the decision was a logical consequence of existing policy. If a Minister from the Foreign Office or from the Ministry of Defence, however, had wished to make a statement, that of course would now be taking place. [Interruption.] Order. I have had no request from a Minister to make a statement. I remind hon. Members that there are Foreign Office questions on Wednesday. I shall consider the Standing Order No. 20 request that the right hon. Member for Chesterfield (Mr. Benn) wants to submit to me tomorrow, as I always do, with all seriousness.

Mr. Benn: Further to that point of order, Madam Speaker. Your statement that a private notice question has to be about a change of policy is an absolute innovation and is not to be found anywhere in "Erskine May", which states that the question must be definite, urgent and a matter of public importance. The North Atlantic Treaty Organisation is an alliance of which we are a member and it is the first time that NATO troops have ever been in action since 1948. That, dare I say so, even falls within the definition of a change of policy. I urge you to consider carefully the statement that you have just made.

Madam Speaker: As the right hon. Gentleman is aware, I do not have to give reasons for my decisions in the House. I have always attempted to be helpful in the House

by giving my attitudes and some of my reasons. Lack of a change of policy was simply one of the reasons for my decision. I have to consider many others and I have done so today. I realise, as do all hon. Members, the seriousness of the matter. If a Minister wished to come to the Dispatch Box, of course we would have a statement from him.

Dame Elaine Kellett-Bowman: On a point of order, Madam Speaker. In your infinite wisdom, have you been able to detect the slightest improvement in the length of questions—or speeches—from Front or Back Benchers at Question Time? The position seems just as bad as it was.

Madam Speaker: I must say to the hon. Lady that I am agreeably surprised. I appreciate the co-operation of hon. Members, but I want us to do better tomorrow and from then on.

Mr. Tom Clarke: On a point of order, Madam Speaker, that arises from the Minister's reply to the question of my hon. Friend the Member for Hornsey and Wood Green (Mrs. Roche). You will remember that the Minister, who appeared to be making a statement, seemed to contradict what he had told the House on Friday. More important, he appeared to speak in contrast to what the Foreign Secretary told not the House, but the British Broadcasting Corporation, on the link with the arms trade—

Madam Speaker: Order. With respect to the hon. Gentleman, I am not concerned with the content of ministerial replies, although, to some extent, I am concerned with their length. The hon. Gentleman will recall that I asked the Minister to cut his reply short. Will he now make the point of order that is for me? Content and argument are not subjects for me. Does the hon. Gentleman have a point of order about breaches of procedure?

Mr. Clarke: I am grateful, Madam Speaker. Tomorrow afternoon, we have an extremely important debate—initiated, to its credit, by the Liberal party. The House is entitled to hear from the Foreign Secretary in that debate. Has he requested the opportunity to make an important statement?

Madam Speaker: No.

Mr. David Winnick: On a point of order, Madam Speaker. No doubt you will know that there is horror and shock in the civilised world, certainly in the House of Commons, over the massacre at Hebron in which about 50 people were gunned down while they were worshipping. That was one of the most terrible crimes that has been committed in recent months. Will there be an opportunity for the questions on the middle east to be taken after Foreign Office questions on Wednesday?
There will, I trust, be an opportunity for hon. Members on both sides of the House to contribute and to make clear that not only Britain, through the diplomatic channels, but Parliament itself wants to express in the clearest possible terms its horror over what has happened and its sympathy with the relatives of the bereaved.

Madam Speaker: It would set a bad precedent were I to anticipate questions that may be on the Order Paper in two days' time. The hon. Gentleman is a member of the


Procedure Committee, so he should be aware that he should wait until Wednesday to see how the questions fall in place.

Mr. D. N. Campbell-Savours: On point of order, Madam Speaker. Are you are aware that the hon. Member for Wiltshire, North (Mr. Needham), the Minister for Trade, the right hon. Member for Wirral, West (Mr. Hunt), the Secretary of State for Employment, and the right hon. Member for Bexley and Old Sidcup (Mr. Heath), the Father of the House, are among 11 hon. Members who are in breach of a resolution carried by the House requiring them to provide information relating to Lloyd's in the Register of Members' Interests, which was published this morning? I wonder whether you are prepared to arrange a meeting with the Chairman of the Select Committee on Members' Interests to give him your advice on how the House should now proceed in the light of the fact that 11 Members have decided that they should breach our resolution.

Madam Speaker: This is a matter for the House as a whole. As the hon. Gentleman said, the Register was published this morning and it is now in the public domain for all Members to inspect.

Mr. Tam Dalyell: On a point of order, Madam Speaker. Law Officers in the Government—in any Government—and in the House of Commons occupy a rather special position. Therefore, I ask whether you have had any request from the Law Officers to report to Parliament on the statements made by the President of the Board of Trade this morning at No. 1 Buckingham gate, to the effect that he was forced to indulge in some type of cover-up, and that undertakings that were apparently given to him in relation to the defence in the Matrix Churchill trial were not carried out by the Law Officers. Any matters relating to Law Officers surely should be a matter of a report to Parliament when it is a matter of principle, rather than waiting for the report of Lord Justice Scott.

Madam Speaker: I have not been informed by the Law Officers Department that anyone is seeking to make a statement, but, of course, the Treasury Bench will have heard what the hon. Gentleman has said.

Mr. John Marshall: On a point of order, Madam Speaker. Has it been brought to your attention that, apart from the Members mentioned by the hon. Member for Workington (Mr. Campbell-Savours), neither the hon. Member for Paisley, North (Mrs. Adams) nor the hon. Member for Rother Valley (Mr. Barron) has completed any entry in the Register of Members' Interests, as they should have done?

Madam Speaker: Order. I do think that this to and fro about the Register of Members' Interests is quite unnecessary—a total waste of our time here. The Register is in the public domain. It is available to all Members as well as to those outside.

Mr. Bob Cryer: On a point of order, Madam Speaker. I am a member of the Select Committee on Members' Interests. You said that the requirement that information be placed in the Register is a matter for the Committee. That is so, but the basic authority for the

Committee to be established and conduct its business is the Chamber and those in the Chamber. As I understand it, there has been a concerted and co-ordinated attempt by members of Lloyd's to refuse to provide information to the House via the Register of Members' Interests. If that were the case, it would be unfair on those Members who have provided information fully and properly, but, if it is the case, I hope that if the Leader of the House hesitates about putting down a motion you will encourage him to do so to ensure that they are brought to book.

Madam Speaker: As the hon. Gentleman knows, as a member of the Committee, it is a matter for the House as a whole—the House in its entirety.

Mr. Benn: On a point of order, Madam Speaker. Reverting to the matter that I raised with you earlier, I was guided by my recollection that a request for a Standing Order No. 20 had to be given before 12 o'clock, but I refreshed myself of the Standing Orders and they say:
if the urgency of the matter is known at that hour. If the urgency is not so known he shall give notice as soon
as possible. The urgency is created by the statement made in another place, where the Minister has gone into all sorts of aspects of the suspension of the aid programme and so on, and therefore it is, I submit, in order for you to accept a motion that I would now like to move, That the House do adjourn under Standing Order No. 20 in order to consider a definite matter of urgent public importance, namely, the assent given by Her Majesty's Government to the North Atlantic Treaty Organisation to take military action in the former Yugoslavia.

Madam Speaker: I will not hear the hon. Gentleman's application now, as he has put it to me, but he would certainly not be out of order if he would like to submit it to me in writing at any time for tomorrow and I would certainly look at it seriously, as I have already indicated that I would.

BILL PRESENTED

PARLIAMENTARY ELECTIONS

Mr. Jeff Rooker, supported by Mr. Neil Kinnock, Mr. Austin Mitchell, Dr. Tony Wright, Ms Glenda Jackson, Mrs. Anne Campbell, Mr. John Garrett, Mr. Frank Field, Mr. Keith Hill, Mr. Mike Watson, Mr. Giles Radice and Mr. Hugh Bayley, presented a Bill to repeal the Septennial Act 1715 and to introduce a fixed term for the House of Commons; to bring the age of nomination for election to the House of Commons into line with the age of voting by amending the Parliamentary Elections Act 1695; to improve electoral registration and absent voting procedures, to introduce weekend voting and increase the number of signatures for nomination of candidates by amending the Representation of the People Acts 1983 and 1985; to change expense limits for candidates; to introduce early voting; to set up an Electoral Commission to administer and monitor all elections in the United Kingdom and to allow that Commission to register political parties and set limits to the expenditure nationally of registered political parties in the period prior to the fixed term elections; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 20 May 1994, and to be printed. [Bill 161.]

European Communities (Treaties)

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hogg): I beg to move,
That the draft European Communities (Definition of Treaties) (Europe Agreement establishing an Association between the European Communities and their Member States and the Republic of Bulgaria) Order 1994, which was laid before this House on 7th February, be approved.

Madam Speaker: I understand that with this it will be convenient to discuss the following motions:
That the draft European Communities (Definition of Treaties) (Europe Agreement establishing an Association between the European Communities and their Member States and the Czech Republic) Order 1994, which was laid before this House on 7th February, be approved.
That the draft European Communities (Definition of Treaties) (European Agreement establishing an Association between the European Communities and their Member States and the Slovak Republic) Order 1994, which was laid before this House on 7th February, be approved.
That the draft European Communities (Definition of Treaties) (Europe Agreement establishing an Association between the European Communities and their Member States and Romania) Order 1994, which was laid before this House on 7th February, be approved.

Mr. Hogg: This is an opportunity for the House to discuss the relationship between the European Union and central and eastern European countries. As the House will know, my right hon. Friend the Foreign Secretary has spent a great deal of time in recent months discussing the enlargement of the European Union. As the House will also know, my hon. Friend the Minister of State is currently engaged in negotiations to that effect. Indeed, that is why he is not participating in the debate; he has asked me to apologise to the House on his behalf.
We are debating the Europe, or association, agreements between the European Union and the Czech Republic, Slovakia, Romania and Bulgaria. As the House may know, the agreements are known as mixed competence agreements. In other words, they require the approval of European Community member states and the assent of the European Parliament. The purpose of the debate is to set United Kingdom ratification in train by approving draft Orders in Council specifying the agreements as European treaties under section 1(3) of the European Communities Act 1972.
The events of 1989 presented us with the opportunity to put an end to the post-war division of Europe, and we are all now seeking to assist central European countries to establish—or, in many cases, to rebuild—the institutions that are essential for a pluralist democracy and a healthy market economy.
In promoting that general objective, the United Kingdom has put in place a programme of bilateral technical assistance under the know-how fund. In addition, we have supported the participation of central and eastern European countries in a whole range of European institutions and, especially, in the European Union itself. That is why we are debating the orders. As the House will know, central European countries wish to belong to the Union, and the United Kingdom looks forward to the time when that can happen.
The agreements that underpin the draft orders were a United Kingdom initiative. Developing relations with central Europe was a key priority of the United Kingdom's

presidency and was symbolised by the summit with the Visegrad countries in October 1992. We worked hard for last June's European Council decision that the associate countries should join the Union as soon as they were ready to take on the obligations of the membership.
The European agreements lie at the heart of our efforts. They are the essential framework for preparing these countries for membership of the European Union. The four agreements that we are debating are very similar to the European agreements with Poland and Hungary that the House debated in detail in February and November 1992. They aim to establish a comprehensive framework for the development of trade, economic co-operation and political dialogue. I shall highlight five elements of the agreements.
The first and most important element is trade liberalisation. These provisions are already in force under interim agreements. Opening European Community markets to the central European countries is crucial to their economic restructuring and political stability. The agreements will, in turn, provide new commercial and investment opportunities to United Kingdom firms operating in the east. They envisage a liberalisation of trade in industrial products over a 10-year transitional period, with the markets of the Community opening more quickly than those of associate countries. They also allow for reciprocal concessions in agriculture, meaning that over time imports from these countries will benefit from progressively lower tariffs.

Mr. Iain Duncan Smith: Will my right hon. and learned Friend clarify a point that is a little obscure to me? Over that 10 years, the products listed in the back of all the agreements will move to a zero level of tariff. What about the products that are not included there? There seems to be some ambiguity about whether any of those products will be included and whether, thereafter, those countries will be able to trade in those products within the Community on the same basis that we do.

Mr. Hogg: There are specific agreements on textiles, steel and coal. Other industrial products are treated collectively, with the Community abolishing its quantitative restrictions at the outset and abolishing its tariffs within three years, according to sensitivity. Central European states will dismantle trade barriers more slowly. Customs duties will be abolished over seven to 10 years and quantitative restrictions will be abolished over 10 years.

Several hon. Members: rose—

Mr. Hogg: I will proceed at this stage.
The second element of the agreements is economic co-operation. That heading covers a wide range of sectors—education, agriculture, science and technology, nuclear safety and consumer protection. It complements the trade liberalisation provisions in aiming to develop the economic and political structures of Bulgaria, the Czech Republic, Romania and Slovakia. Technical assistance from the Community's PHARE programme is available to finance this co-operation.
The third element concerns approximation of laws and standards. The Union will help the four countries to bring their legislation closer to existing European Community standards. Approximation to existing Community standards is a key step in preparation for Union membership. Some of the associate countries are already ensuring that


all new legislation is compatible with Community law. The Copenhagen European Council additionally decided that the Union should establish a task force composed of Commission and national experts to co-ordinate and direct that work.

Mr. Tam Dalyell: On the subject of education and culture, may I yet again raise the question of the trade, fearfully one way, in ecclesiastical art? I refer to letter C93/18235.MA from the Department of National Heritage. Northern Bohemia contains some of the most beautiful wooden ecclesiastical art anywhere in the world. Theft for the Frankfurt and London markets is such that part of the European heritage is being destroyed. That is not an easy problem to resolve. I give notice that if I catch your eye, Madam Speaker, I should like to refer to the matter in some depth. I hope that the Minister can consult his colleagues before the winding-up speeches.

Mr. Hogg: I recall that, in February 1992, when the agreements were debated on the Floor of the House, the hon. Gentleman raised precisely that point; he has a long-standing interest in it. My right hon. Friend the Member for Watford (Mr. Garel-Jones) responded at that time. I shall listen with considerable interest to what the hon. Gentleman says. Like him, I suspect that the problem is extremely difficult to tackle, but I will most certainly listen to what he says.
The fourth element is political dialogue. The agreements establish Association Councils which will meet once a year at ministerial level to review the agreements and to build on them. The agreements also provide for meetings at Head of Government level and for close co-operation on foreign policy at senior official level.
Fifthly, there is the question of financial co-operation. The agreements provide for continuation of temporary financial assistance to Bulgaria, the Czech Republic and Romania through the PHARE programme, which has so far resulted in the Community contributing £725 million of technical assistance to the four countries. In special circumstances, the Community may also provide balance of payments support to those countries in the context of the G24. The Community has committed more than £2 billion in balance of payments support to those countries since 1991, and it is currently considering requests to give further support to Romania and Bulgaria.
I should mention the inclusion—

Mrs. Ann Clwyd.: Will the right hon. and learned Gentleman give way?

Mr. Hogg: No. I am proceeding now.
I should mention the inclusion of the important preambular paragraph in each of the agreements that look forward to the associate countries' accession. We want the associate countries to join the European Union as soon as they are ready to take on the economic and political obligations of membership. That commitment was made, at British urging, by the Copenhagen European Council in June last year.

Mrs. Clwyd: Will the right hon. and learned Gentleman give way?

Mr. Hogg: 'The agreements will help Bulgaria, the Czech Republic, Romania and Slovakia to prepare themselves, and—

Mrs. Clwyd: Will the right hon. and learned Gentleman give way?

Madam Speaker: Order. I am given to understand that the Minister is not prepared to give way. The hon. Lady must not persist in the circumstances.

Mr. Hogg: Thank you, Madam Speaker.
The object is to enable those countries to prepare themselves, and the agreements are vital to those countries as a symbolic and practical confirmation of their place in Europe.

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Mr. Allan Rogers: We support the motions, which represent significant developments in trade with former communist countries and newly emerging democracies in eastern Europe. Undoubtedly, such links will become strong and trade will increase and lead, as the Minister has said, to closer formal relationships when internal economic, political and trade conditions are met by aspirant countries of eastern Europe.
The issue of enlargement, of course, is for another time; the motions relate specifically to trade and economic relationships and the development of them. It is important for us in the west to support economic development, which is surely the underpinning of democratic societies.
The agreements open political dialogue which is intended to familiarise central and eastern European countries with the political framework and foreign policy activities of the Community. More important in the short term, the agreements allow the free flow of, and access to, goods, but they do not particularly contribute to the creation of well-functioning market economies in eastern European countries. That is something for countries to work out for themselves.
The Minister referred specifically to textiles, steel and coal. One matter of concern is dumping. What provision will be made, and what discussions have taken place, on restrictive anti-dumping legislation or controls? At present, as we all know, the problem cannot be resolved inside the European Community. It certainly cannot police it in any way. The general facilities to enable the European Community to do that are quite small. Unfair trading and state subsidies are still burning issues in the present European Community.
South Wales and other industrial areas have suffered from the dumping of special steels and white goods, for example. A long time ago, when the Davignon plan was introduced to control and restructure the iron and steel industry in the European Community, this country virtually volunteered to have its steel industry annihilated over three or four years from about 21 million liquid tonnes down to about 11 million liquid tonnes. At the same time, the Germans and Italians were increasing their production.
In respect of works such as the Hoover works in south Wales—those works are near the constituency of my hon. Friend the Member for Pontypridd (Dr. Howells), and many of his constituents work there—we saw the dumping of white goods. Goods were put on the market by Italian washing machine manufacturers at a lower price than Hoover could buy special steels. There was an obvious case of state subsidy going to Italian washing machine manufacturers, but the European Community did not have the resources to police it. It is all right to bring in these agreements, but they do not work in the European


Community in their present form, and we should not extend them to other countries if we are not able to control the problem of dumping in the Community.
There are other larger issues such as agricultural products and gaining access to markets because many of the aspirant countries are large agricultural producers. Another issue is the freedom of movement of labour within the Community and the agreement areas. Outside those major issues, we have the possibility of creating trading opportunities for the various member states.
Whereas we must recognise that the agreements are between the European Union and countries individually, trade within the agreements will be between individual countries in the European Union and the individual countries of the agreements. It will not be trade between the European Union and a group of countries—individual countries in the European Union will have to do the trading. Of course, if countries do not take up the opportunity, we miss out yet again.
Typically, Britain is already lagging behind. In the circumstances, the Government do not have the additional leverage of overseas aid to correct the distortion of market forces. Indeed, we are falling rapidly behind other European Community nations in our level of trade with former communist countries. For example, Germany has almost ready access into those markets. Indeed, some of the markets have a large German speaking and ethnic German population. Last year, Germany exported $23.9 billion worth of goods into those countries. Britain exported $2.7 billion worth of goods—that is one tenth of what Germany exported. We are way behind France, which exports $4.7 billion worth of goods. Italy exports $6.4 billion worth of goods.

Mr. Bernard Jenkin: rose—

Mr. Rogers: I will give way, but I shall finish my point first. Our exports to those countries are about equivalent to that of Holland, which has a population of about 15 million. Surely we will not be measured by that particular yardstick.

Mr. Jenkin: Would the hon. Gentleman like to comment on the fact that the Commission has reduced the PHARE programme, which is equivalent to the European Community's know-how fund? The money appears to have been diverted through a new structural programme, predominantly under German influence. The Commission spent large chunks of that money in Sudetenland, where there are many German-speaking people, to promote trade in German goods. That does not quite bear out the denial to which the hon. Gentleman referred, and I wonder whether he could comment on that.
Would not it be better if we got the Commission back under control and spreading its money on a more objective basis, rather than letting it be hijacked by particular national interests?

Mr. Rogers: The hon. Gentleman is a specialist in Europe, shall we say, or a specialist in being anti-Europe, so he would know more details about such little nuances.

Mr. Derek Enright: rose—

Mr. Rogers: I shall just answer this point. I do not think that anyone is foolish enough to believe that countries in

the European Community act in the Community's interests—they act in their own interests. There are no ifs or buts about that. That is by no means an anti-European Community or anti-European Union statement—it is the truth of the matter.
I remember some time ago—the hon. Member for Hendon, South (Mr. Marshall) and my hon. Friend the Member for Hemsworth (Mr. Enright) will certainly remember this, because they were Members of the European Parliament at the same time as I was—that the external trade commissioners for the European Commission were always Frenchmen: Pisani and Cheysson—

Mr. Jenkin: And Brittan.

Mr. Rogers: No, it was long before Brittan. I did not realise that Brittan is French.
If one went anywhere in the world, one could see that a lot of European Community business went to France. The hon. Member for Hendon, South said—in weaker terms than those used by Mr. Alan Clark, a previous Minister for Defence Procurement—that he did not particularly care to which countries we exported, as long as those exports provided British jobs. That is what the French are all about within the EC. The hon. Gentleman is practising the same principle here today.

Mr. Enright: Is not it true that continental companies, and especially German companies, keep much closer tabs on the various funds that are available? That is because of the regionality as much as anything, and Governments are able to assist firms in instantly reaching those funds. That is quite contrary to something that I overheard today from one of those wretched mobile phones as I travelled from Doncaster to King's Cross. A business man was saying, "Well, we were doing all right in Czechoslovakia until the damned Foreign Office got in the way".

Mr. Rogers: That is very perceptive. I will press on. I was given the brief a short time ago, and I decided that I would speak only for a few moments.
Our volume of trade with eastern Europe is increasing more slowly than that of other European Community countries. We are not only behind other countries; we are falling further behind them. That adds to the point made by my hon. Friend the Member for Hemsworth. The Government do not help British industry in the matter and we are losing markets to other countries.
Even if we are noble about the matter, we must realise that increased trade with those countries is certainly the best form of long-term aid. We have heard today that the Foreign Office believes that the agreements create no problems for British industry. I think that the proof of the pudding might well be in the eating.
I have read details of the negotiations that have taken place and I do not think that the Government have stood up for Britain, or batted for Britain, quite as much as they did in Saudi Arabia or Malaysia. Perhaps we had better bring back a new opening bat, although that would not be a proper description of the noble Lady, the previous right hon. Member for Finchley.
The Foreign Office and Ministers must get the CBI, chambers of commerce and trade organisations involved, give them assistance and stress the importance of building up trade. We cannot sit back and watch imports and exports


between other EC countries and eastern Europe. If we are in the EC, we must get in there pitching to improve Britain's position and our access to eastern Europe.
We must make assistance more effective by supporting infrastructure developments, and that is why we welcome the technical and educational assistance to those countries. If there are to be free market economies and stable democracies in those countries, we must extend our trade into the ex-communist countries. It is in all our interests to create a stable climate in Europe. At the same time, it is certainly in our interests for the Foreign Office to be more forceful in increasing our exports to get British jobs.

Mr. John Men: I will try to obey your injunction to be brief, Madam Speaker, but I would like to congratulate the hon. Member for Rhondda (Mr. Rogers) on his performance at the Dispatch Box on behalf of the Opposition. I thought that the hon. Gentleman spoke just like a member of the 1922 Committee, in particular when he placed strictures upon the performance of the Foreign Office. Scratch a Tory and one finds a Foreign Office-phobe at any time.
I support my right hon. and learned Friend the Minister who introduced the statutory instruments. I should like to take advantage of the opportunity that he set again to discuss enlargement and to say that, particularly as a result of the decisions of the Copenhagen Council of June 1993, enlargement is at the centre of Community policy. It is a decision that will have the consequence of transforming the nature of the Community through a passage of time. To some extent, what we are debating this afternoon is what will be that passage of time and how uniform it will be. We do that particularly in the context of the prospective European elections in Britain.
I welcome the debate because it enables us, as a preliminary to the elections, to debate issues that will properly be taken to the hustings in June. I say "properly be taken to the hustings" because it will be important to identify in the elections not merely the divisions—divisions which are reflected in the House—but the areas of common concern.
I welcome the support expressed by the hon. Member for Rhondda for the draft instruments and the concept of enlargement. He was properly somewhat agnostic about the speed with which that enlargement might be achieved.
I thought that the hon. Member for Rhondda was wise to remind us of the difficulties that are inherent in the economic fusion of the applicant countries and the European Union. In this debate we necessarily confine ourselves to the terms of reference. The politics of enlargement come behind the economics. For example, there was not much delay on the part of Germany when it sought to assert its interest in Croatia. I do not make any criticism of the German behaviour. I am simply acting as the hon. Member for Rhondda said. He did not say it in quite those terms. He said that he was not here for all that Euro-fuzz but as an honest-to-God Front-Bencher given the job only a few hours or days ago. He could bring to the debate only his own robust, South Walesian common sense tempered by some experience at Strasbourg. I cannot think of a more magic and potent formula than that.
We know that the politics of central and eastern Europe are at their most challenging. I believe that the imperative today, whatever the uniformity of the eventual economic

arrangements, is to give political assurance to the countries of central Europe as they see the turmoil in Russia and some of the adjacent states still unresolved.
In those circumstances, when we come to our election year and we talk about enlargement, we talk about the politics, which must be imprecise. The economics are rather more tangible because they are contained in the statutory instruments that we are discussing today. We have to ask what is the general thrust of the policy. That is a crucial question for the European Union as a whole. Will the thrust to embrace nations with very different economic performance than our own be sustained or hindered by a commitment to a single currency, a European bank and converged economies?
That is not some odd question from a member of the awkward squad below the Gangway. It is absolutely at the heart of the debate, whether those in authority wish it or not. I say that because the Copenhagen Council, referring to the applications for membership of the Community from the central European countries, said:
Membership requires that the candidate country has achieved stability of institutions, guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities, the existence of a functioning market economy"—
God help us—
as well as the capacity to cope with competitive pressure and market forces within the Union.
That is the sort of ritual language with which we are all reasonably familiar. It is Euro-speak and the hon. Member for Rhondda must not rock his shoulders in mirth at my description, as he is now an eminent person with responsibilities sitting on the Opposition Front Bench. That is the challenging passage for him and for the Labour party, which is committed to economic and monetary union and to converged currencies.
The passage continues:
Membership presupposes the candidate's ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union.
No one who listens to this debate or hears about the problems caused by the different backgrounds of member countries—such as agriculture, textiles and steel—can envisage any future for the Union other than one in which there is much elasticity in the relationships between the east and central European countries and ourselves.
Economic and monetary union will merely make infinitely more difficult what, in any circumstances, will be a challenging economic proposition—namely, bringing those countries into our partnership. We merely have to consider the difficulties that were created by the entry of Portugal and Greece, which have substantially different economic standards from those of the core EC member states.

Mr. Jenkin: And eastern Germany.

Mr. Biffen: Yes, my hon. Friend is ever helpful and encouraging and I accept that reinforcement.
Because enlargement of the Community is so important for both it and all the peoples within it, enlargement will obviously be central to the debate in this country in June at the European elections. We are entitled to discuss how we envisage that that objective will be pursued.
Furthermore, it is impossible to consider the exhilarating challenge of enlargement without realising that it will take a long time and that the objective will adjust with time. Enlargement will therefore be at the heart of those aspects of the Maastricht treaty that will be


renegotiated in 1996. The June election campaign will be incomplete unless our political leaders make clear statements about how they view prospects for enlargement and renegotiation.
I have shamelessly sought to widen the debate to more philosophical considerations than the relatively narrow platform provided by the statutory instruments. However, if we are to have a successful Community it must be based not only on a relaxed relationship between the nation states of Europe, but on the peoples of Europe being led to understand the objectives of the political elites of those countries that fashion the relationships. That opportunity will come in this country in June, at the European elections. A forewarning of what might be a legitimate agenda does not come one moment too soon.

Mr. Tam Dalyell: As so often during the past thirty one and a half years, I agree with many of the insights of the right hon. Member for Shropshire, North (Mr. Biffen). He is absolutely right about the importance of the subject under discussion. I am therefore a little shamefaced about turning to a subject that I must concede is not the most important aspect of the matter—the problems associated with the transfer of ecclesiastical art and valuable objects from Czechoslovakia to the art markets of western Europe, about which I have set down a marker.
It would be a great irony if, having suffered a decade of the Nazis and four decades of the communists, and having maintained much of the traditional heritage of the eastern European countries, now that those countries are opening up, the imperatives of the market were to wreak havoc on the art treasures of eastern Europe. Neither the Nazis nor the communists succeeded in doing that.
The House will forgive me if I tell colleagues a true little story. Two years ago, the all-party heritage group, which is extremely well led by the hon. Member for Staffordshire, South (Mr. Cormack), went to Czechoslovakia. That organisation, in case anyone jumps to conclusions, does not organise freebies. We pay a full and proper amount for ourselves and for our wives, although we get an exceeding number of privileges in being received by the experts in the country to which we go. When we went to Czechoslovakia, we also had the privilege of going to the private apartments of President Havel. The all-party heritage group is known to a number of hon. Members.
On the eighth day of our visit, based in Prague, we went to northern Bohemia. On the way up there, as we passed through a small town, a number of us at the back of the bus said, "Hey. We must stop here. That looks like a fascinating church." The hon. Member for Staffordshire, South acceded, somewhat reluctantly, because he is a great disciplinarian, to that request from the back of the bus. We stopped at the church. Out we got and went into it. It was full of the most beautiful objects in marble and wood.
After looking around for some 10 minutes, it was then discovered that those of us who had gone into the church were locked inside. There was no way that we could get out. Imagine the scene. A number of distinguished Members of this House and a number of distinguished Members of the Upper House, such as Lord Crathorne,

who is joint secretary of the group, together with our wives, were locked firmly in a church with no visible means of getting out.
An elderly priest eventually appeared and produced his keys. When it was realised that we were the parliamentary delegation to Czechoslovakia, everyone was full of apologies at having such distinguished souls, some of whom were very meek, like me, but others, like my hon. Friend the Member for Warley, East (Mr. Faulds), were less meek on the subject, locked in the church.
That elderly priest then explained in halting English what it was all about. He was full of excuses and said that had he known who we were, he would not have locked us in, but that people had had such bad experiences in so many of the country churches in that part of the country that they were doing what they could to protect what remained of their heritage. So many objects had been just snaffled, whipped and taken away. It was pure common-or-garden theft of holy relics.
The German army, many of whom were Roman Catholics, did not, it was said, quite like to steal such objects. Many of the Russian soldiers, who may have had feelings about icons in their countries, demurred from taking other people's religious art. The elderly priest explained to us that those who thought that they could make money in the art markets of Amsterdam, Frankfurt or London had far less inhibitions than those in the Nazi armies or the Soviet armies.
In a sense, it was a poignant moment. But it highlights—I hope, poignantly—the fact that it is a tremendous financial temptation either simply to take objects or to reach a pitiful bargain in which the money exchanged bears no relation to the value of the objects in the western art markets.
When we returned, I raised the matter immediately with the Foreign and Commonwealth Office and received a concerned response, as I had from the ambassador. I then discovered that the Prime Minister was going to Czechoslovakia. I saw him personally before he went and said that, although it was probably not the main content of his discussions with President Havel, would he nevertheless mention it to those quarters in Prague who might be concerned. The Prime Minister kept his word. On his return, he said that he had asked the ambassador to look at the matter on an on-going basis.
I am criticising neither the Government nor the police but it might be for the convenience of the House if I stated the latest position. It is set out by the Under-Secretary of State at the Department of National Heritage in a letter to me dated 25 February. It said:
During the debate, on 14 February, on the draft Statutory Instrument to implement the EC Directive on the return of cultural objects, you drew attention to the problem of thefts from the Czech Republic, Russia and elsewhere; and I undertook to look at previous papers on this subject. You also enquired where the question of monetary thresholds came into the problem of the theft of cultural objects. I have now had an opportunity to consider these points.
I fully appreciate your concern about the growing problem of arts thefts in the Czech Republic, and elsewhere in Eastern Europe. The previous papers on this subject make sad reading. As a criminal matter, the subject is essentially one for Michael Howard as Home Secretary; but, as you know, Tim Renton, when he was Minister for the Arts requested the cooperation of the London art trade in helping to identify the missing objects should they appear on the market here.
First, what is the latest stage of the request to the London art trade? Secondly, I am told by people in the art


trade that, in most cases, experts know jolly well what is likely to have been taken, especially when it comes from Russian orthodox and Czechoslovakian or Polish churches. It is not too difficult to identify what is likely to have come from those sources because of the nature of the art, so identification is not the major problem. The major problem is what to do once identification has taken place.
The Minister's letter went on:
I understand that the Metropolitan Art and Antique Squad are also working closely with their counterparts in the Czech Republic (and other Eastern European countries) to try to give assistance in countering the problem.
I did not mention the name of the place where distinguished colleagues of ours were incarcerated in the church because no one wants to give away place names and make matters worse. I am, however, prepared to tell anyone interested after the debate.
There should be some kind of register so that the British and European authorities can invite the Czechs and Russians to register what has gone missing and what worries them.
The Minister went on:
I think that there may be some misunderstanding about the EC Directive. This provides a mechanism for one Member Slate to request the return from another Member State of a cultural object, which falls within the scope of the Directive, and which has been unlawfully removed from the requesting State on or after 1 January 1993. The Directive is essentially aimed at objects which have been illegally exported. The European Union does not have competence in criminal matters (i.e. art thefts), although a stolen object could fall within the scope of the Directive if it had also been exported in contravention of the requesting State's export laws.
I am told that things would have been much easier had Britain been a signatory to UNESCO. The Minister may reply to me in his speech or, if he prefers, by letter, but I should like to know whether that is true. Would being a signatory add more legal clout to any action to protect the heritage of eastern Europe?
The Under-Secretary ended:
as you know, co-operation via Interpol Already provides a means for recovery of a stolen item regardless of monetary value.
I know better than to make detailed inquiries into how Interpol goes about its business, and it would not be desirable in this case that I or any other hon. Member should be told about that. But I do ask for a clear assurance that the Government are in active touch with Interpol on this matter and are making real efforts to do something about it.
Although this is a difficult issue, the stakes are extremely high—including, first, the cultural heritage of eastern Europe; and secondly, more importantly, the self-esteem of the people of eastern Europe and their deep regard for their relations with the west. In Czechoslovakia and Russia people of influence are deeply upset by the fact that, after they have tried for much better relations with the west, part of the result of those better relations is the depredation of their own cultural heritage.
The House has kindly given me time and attention to submit this—admittedly narrow—aspect of a much wider and important measure. I do hope, however, that right hon. and hon. Members will come to regard the matter in the same sustained way as some of us have already tried to do over past months.

Mr. Iain Duncan Smith: I am aware of the time and I shall try to keep my remarks brief.
I welcome the Minister's comments about the inclusion of the four countries in the agreements, but I should like to make a few points about some of the detail, which is important—the more so in the light of the speech by my right hon. Friend the Member for Shropshire, North (Mr. Biffen).
The debate gives us an opportunity to look back in on the Community. That can sometimes be difficult; it is rather like looking through a glass darkly. We often see in only from the outside, so important matters can be missed by those who give their full support to everything that the Community does, without proper scrutiny or without determination to find out why.
One of the greatest difficulties that we face is the fact that the Community is obsessed with political ideals, to do with the single currency and so on, instead of with free markets and the sort of competitiveness embodied in the measures. The trade agreements give us the chance to stop and look again at what Britain's purpose in the Community has always been.
Although I welcome the agreements, recognising that they are based on our original intention to open up the Community to wider markets, it is also clear that when the provisions come to be written, self-interest comes increasingly to the fore—short-term political interest and short-term goals. That avoids long-term, serious considerations such as those on which I believe that our Government have been set but from which they have been distracted in the course of the negotiations.
I am particularly interested in a letter to the Financial Times of 2 June, in which the Czech minister for industry and trade, Vladimir Dlouhy, said:
Economic recovery is simply stifled if fair trading access is not assured, for trading is really the only long term effective aid.
He is right. The key is to open up our markets and ensure that both we and eastern Europe improve our abilities as a result.
When we look at the documents, we find that the two key sectors are industry and the common agricultural policy. I shall deal first with the common agricultural policy. The debate gives us the opportunity to look at it again and to try to understand what has gone so badly wrong. The system takes up fully £46 billion—more than half the Community budget. Only 40 per cent. of that ends up in the hands of farmers; nearly £28 billion goes in administration support matters and, dare I say it, a vast amount of growing corruption. The Commission has finally seen fit to put in the right people to sort that out, but corruption is part of the system and goes right to the bottom.
We can no longer carry on with a system of agricultural support that ensures that the very people at whom it is aimed see least of it. The absurdities are demonstrated time and again. Each family pays something like £1,000 extra every year as a result of that intervention at the supermarkets and shops, where they pay higher prices as a result of the shoring up of that inefficient policy. We see clearly how self-interest, support for the CAP and the determination to keep it as it is has meant that we have shut our markets to the eastern Europeans to a far greater degree than we should have done.
We should be opening our market to those countries and saying that we welcome all of their agricultural produce and their processed agricultural produce. We should ask them to come and show us exactly how far we have departed from proper free trading principles. We have not done that. We have allowed self-interest to dictate that we shut areas of the market. I made the point earlier to my right hon. Friend that, even after 10 years, areas are still excluded. No mention has been made of those.
Let us look again at steel and coal. Recently, in the debate on steel, we saw a fascinating exchange in which my right hon. Friend the Minister for Industry went to the Dispatch Box to defend the absurd practice that has been going on in the Community for so long and that has resulted in failure to open the market and to get rid of subsidies. I notice that the document is carefully worded so that we end up helping to protect those heavily subsidised industries in Germany and Spain, those 60,000 jobs that everybody is scared of getting rid of, when Britain has set about that task without fear or favour. Poland has shed more than 70,000 in its steel industry, yet we still wish to help the Germans, Spanish and others protect themselves from what is justifiable free trade with eastern Europe, which would help to lower the costs of our manufacturing industry and make us competitive world wide.

Mr. Rogers: Does the hon. Gentleman not accept that the Conservative Government took us down this road and were hellbent on destroying the British steel industry in the early 1980s? That was a conscious policy of the British Government.

Mr. Duncan Smith: I am grateful for that intervention, because it gives me an opportunity to declare again how much I supported my Government's drive to make our industry efficient throughout the whole of the 1980s. It is now one of the most efficient in the world. I am saying not that we should have shored it up but that we should now ensure that the others play the same game. We could then expand our industry as a result of our competitiveness. That is what the purpose of the eastern European deal should be about: letting them come in and compete.

Mr. Rogers: Will the hon. Gentleman give way?

Mr. Duncan Smith: I am conscious of the time and should like to press on.

Mr. Rogers: It is only a small point. The hon. Gentleman and the Conservative party, in the so-called strive for efficiency and streamlining, are quite prepared to sacrifice tens of thousands of workers and their jobs, with no foreseeable possibility of the other countries in Europe coming into line with us. It will be 20 years before they do that.

Mr. Duncan Smith: The hon. Gentleman clearly thinks that it is 20 years. If we are both right, we should do something about it. The point is that, by restructuring the steel industry in Britain, we have shown the way to the rest of Europe. It is high time that the rest of Europe did the same and stopped playing games with their 60,000 jobs. Such an agreement as this is the perfect opportunity to do so.

Mr. Jenkin: Is it not a fact that, during the 1980s, we increased our steel exports to the European Community

and elsewhere from a mere few hundred million pounds-worth to well over £2 billion per annum? That is the reward for getting one's steel industry into a fit condition. That is how one keeps permanent jobs in the UK. As my right hon. and learned Friend the Minister said, even the products listed in the agreement for the phasing out of the tariff barriers are to be phased out according to sensitivity. Does not that allow every Community country to put an obstacle in the way of the falling tariff barriers so that they are likely to remain there for a good deal longer than the 10 years according to the agreement?

Mr. Duncan Smith: My hon. Friend makes his point well and backs up all the points that I have made. I fully agree with him.
Let me move on for the benefit of hon. Members and my right hon. Friend on the Front Bench. I noticed the other day, when reading through documents from the European Community, a report commissioned by DG 16 on the competitive market of Europe, which analysed the benefits and problems that would come to the European Community. The report comes to terms with that and decides that huge benefits are to be drawn from opening the market to eastern Europe immediately. In so doing, one would have thought that the Commission would follow suit and publish it with much publicity, but the Commission changed the head of DG 16 and the man who was put in his place was none other than an ex-cabinet colleague of Mr. Delors. Clearly it does not suit his purpose to have its report, because the cohesion group of countries, which so much supports many of his policies, would not like it. Nor, perhaps, would some of the French farmers, so the Commission has sat on the report.
Hon. Members would be forgiven for not knowing of the report's existence, because it was deliberately excluded from their view. That applies also to the report that is now being published on the CAP; it, too, is being sat on by the Commission because it does not like what is in it. Rotten practice leads to rotten trading. We must ensure that we get rid of that concept. In many respects, while I do not doubt my Government's intentions on those matters, the problem with an agreement such as this is that it leads not to free trade but to managed trade. That is the clear purpose of the agreement, not so much opening up and saying, "Let us take on the best you have. Let us work together to get a free and proper market" but rather, "Let us ensure that we take only the products that frankly we cannot make ourselves; or exclude your elements of trade that we do not like because they affect our vested self-interest."
I am intrigued as to how political input has been used to change all of that. Hon. Members have referred to the money for the PHARE programme. There is no question but that £115 million of that was diverted out of the budget at the end of the year, has been stuck into some form of structural fund and is now being used to support programmes directed from Germany in Silesia and Sudetenland. The purpose of that is clearly that it supports political positioning in Germany and other countries. Demand-led money, like our know-how fund, which I think is excellent, is the purpose of the PHARE programme and leads to better investment than anything dictated from one of the nations inside the European Community.
The key point is that we want a free market. I urge my right hon. and learned Friend to press the Commission and other member states not to fear what is out there but rather to see it as a challenge and to restructure the whole of the


Commission and our Community so that we meet the challenge as a free-trading group of countries rather than as a group of self-protected self-interest countries that would seek to close the market to those who would help us to compete.
There is no doubt that we need the trade and influence of those countries. If we stick exactly to what is in the agreements, we shall do no more than help those protected interests in the Community and we must ensure that we go further. If that means changing the Community, the common agricultural policy and our industrial policy, so be it: that is what we need to do. As my right hon. and learned Friend the Minister has said, if it means renegotiating the Maastricht treaty—as I believe that it does—that is what we must undertake.

Mr. William Cash: I followed the speech of my right hon. Friend the Member for Shropshire, North (Mr. Biffen) with enormous interest—as, indeed, I followed his speech the other day. I find myself in complete agreement with the sentiments that he expressed today, and with those expressed by my hon. Friend the Member for Chingford (Mr. Duncan Smith).
My right hon. Friend the Member for Shropshire, North said that monetary union was at the heart of the debate, which of course it is. Let me elaborate on that point by examining what the proposals for economic and monetary union actually mean, as applied to the countries mentioned in the motions.
The preamble and explanatory notes to the agreements, and the main text, refer to
an appropriate framework for political dialogue
and the improvement of democracy in the states involved. We all want the agreements to take effect—not with faint praise or faint application, but so that they can enhance the economic opportunities available and free trade and freedom of choice can exist together. What, in the medium to longer term, does economic and monetary union imply for those countries? Far from continuing to improve the prospects for democracy—of which I am sure that my right hon. Friend the Member for Shropshire, North would approve—it will actually prevent democracy from burgeoning. It will mean eventually handing over the running of the countries' economies to unelected, unaccountable bankers; it will mean giving with one hand and taking away with the other.
A selfish streak run through the proposals—as my hon. Friend the Member for Chingford pointed out—in that they do not go far enough and, indeed, are positively exclusive of certain activities. Incidentally, those are frequently the most important activities in the countries concerned. In addition, the countries will be prevented from being able to develop their democratic and free-trading relationships with the rest of Europe.
I support the proposals, however, as I supported the European Economic Area Act 1993. I note—as I noted then—the absence of enthusiasm, shown by nonattendance in the Chamber, of some hon. Members who go around criticising those of us who would prefer to be described as Euro-realists. I recall that one of the notable absentees on a three-line Whip was my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), who had the nerve to attack me on television yesterday—much to my amusement and pleasure, I may say. Whenever he attacks me, I regard my stock as having gone up by about

50 per cent. He did not vote on the European Economic Area Act, and I do not observe his presence today. That is a great pity. Those of us who are true Europeans, and who want the arrangements to work properly, wish to be present—as, indeed, my hon. Friends and I are today.
Having its own elections does not make a country a democracy. As I pointed out in a pamphlet that I wrote for the Bow Group in 1990, if we want to bring in those who have fought communism, have been at the sharp end and know what it is all about, we must give them the opportunity not only to have a free democracy but to engage in the kind of trading in their seminal industries that will enable them to match the theoretical democracy that they are being offered with a practical ability to deliver it, in terms of increased well-being for their people.

Mr. Walter Sweeney: I agree with my hon. Friend about the poor attendance in the House. Is it not particularly notable that, while Conservative attendance is quite significant, the Opposition Benches are virtually bare?

Mr. Cash: That demonstrates the extent of the Opposition's enthusiasm. As we are in the close season for European elections, I am more than happy to add to the Government's firepower in attacking Labour Members and Liberal Democrats for their weak-kneed, third-rate, impoverished view of Europe's future. It is exemplified by the fact that, apart from Opposition Front Benchers and the hon. Member for Linlithgow (Mr. Dalyell), no one is present to speak up for those two parties. At least a reasonable number of Euro-realists, who are committed to Europe, are present on the Conservative Benches.

Mr. Rogers: Whatever Opposition Members lack in numbers, we more than make up for in quality. Part of the reason for the lack of numbers is probably the fact that many of my comrades—comrades, indeed!—heard that the hon. Gentleman was going to make a speech.

Mr. Cash: I am always delighted to respond to the hon. Gentleman, but he cannot get away with cheap tricks like that. The fact is that no one is sitting behind him, probably because no one agrees with him.
There is another problem: the difficulty that we now face in regard to the kind of Europe that the agreements add up to, in conjunction with the European Economic Area Act, the Maastricht treaty, the Single European Act and the treaty of Paris. My right hon. Friend the Member for Shropshire, North is right. During the debate on the confidence motion, in the presence of my right hon. Friend the Prime Minister, I called for a renegotiation of the treaty. It is perfectly apparent that it is not working and it is clear that, when added to the agreements, the acquis communautaire—which lies at the heart of the treaty—will be a millstone around the necks of the newly emergent democracies, with incalculable consequences for peace and stability throughout Europe as a whole.
Scratch some of the recently fascist countries in western Europe, look at the civil disorder, at the mistakes that we have made in terms of our policy on the recognition of Croatia and Bosnia, at the extent of the commercial and political instability that is being generated and at the geopolitical landscape. Consider the present concern about what is happening in Kosovo and Macedonia, in relation to the Greeks and the Turks. Trace that through the Balkans, with today's critical problem over air strikes—which I


happen to think necessary, but that is another point—continue into the old Russias, with Mr. Zhirinovsky and the current uncertainty and tension.
Finally, consider the instability that will follow in the countries mentioned in the motions if the monetary union described by my right hon. Friend the Member for Shropshire, North collapses like the ERM and drops like a stone. What kind of Europe will that invoke? It will invoke civil disorder and all the uncertainties contained in the agreements. I am certain in my own mind, and from what I have picked up from friends in the countries involved, that they are by no means embraced enthusiastically by people there. They know that they constitute no more than a half-hearted and rather selfish measure. It is precisely because we have not been sufficiently forthcoming that we are tending to destabilise those countries.
Furthermore, if the EMU proposals indeed collapse, there will be chaos throughout Europe, which would only be worsened if the Parliaments of Europe have been emasculated by the reimposition of the totalitarianism from which those countries have only recently escaped. Hon. Members should please bear that in mind and consider the consequences of not allowing those countries to be let in. They have a great future if they are given an opportunity to enjoy proper free trade and proper democracy.
Confusion exists in the European Community, the so-called union, between nationalism and federalism. It will not be resolved by such half-hearted measures, welcome as they are for the time being. As Ian Davidson stated in the Financial Times on 16 February:
it seems unlikely that members will renegotiate the Maastricht treaty, and certainly not in the middle of negotiations with the Efta candidates.
The treaty will also not be renegotiated while the proposals involving other states adjacent to the European Community are under discussion.
To resolve the problems that remain, we must renegotiate the treaty of Rome and the treaty of Paris—to which my hon. Friend the Member for Chingford referred. The difficulties over the treaty of Paris were revealed by the fining of British Steel and the sale of Rover. We must also renegotiate the Single European Act—which is not working properly and needs internal reform—the Maastricht treaty, the arrangements that are under discussion today and the European economic area. Unless we do that, we shall consign the future of Europe to deep uncertainty and potential chaos.

Mr. John Marshall: I was interested in the ding-dong about the steel industry between my hon. Friend the Member for Chingford (Mr. Duncan Smith) and the hon. Member for Rhondda (Mr. Rogers). The hon. Member for Rhondda has forgotten that, in the early 1980s, the steel industry received £1 million of subsidy each day. There is no long-term future for employment if subsidy is given on that scale. It is much better to have a steel industry that is the most efficient in western Europe because that is the only guarantee of long-term employment.
In discussing the orders and the future, we should consider employment not only in the steel industry but in the steel-using industries, and the benefits for consumers. The benefits for employment in the steel and steel-using industries and the benefits for consumers will result from

having an open market and by encouraging imports from countries in central Europe. We should remember that central Europe has received an appalling economic legacy from communism. Industry in central Europe was heavily overmanned, was greatly dependent on intra-COMECON trade and suffered from heavy under-investment and its production was environmentally most unfriendly. The economies of central Europe were distorted by unsustainable subsidies—[Interruption.] I should have thought that most hon. Members would agree that the German Government's subsidies were unwise and unsustainable. Their policy on the former East Germany has caused it and other countries in the European Community great economic difficulties. Even former Italian Governments found their subsidy levels were unsustainable. The Italian electorate decided that such Governments were unelectable, even if they were easily bribeable while in power.
The economic inheritance that was given to the democratic Governments of central Europe coincided with the belief that democracy would lead to an early and quick improvement in living standards. Those unfortunate countries have had to suffer a crisis of rising expectation, with their people expecting living standards to improve dramatically. The reality is that they have suffered substantial inflation, economic stagnation and heavy increases in unemployment. It was for those reasons that the former communists were able to win an election in Lithuania. That is why there is a danger that other former communists will regain power, admittedly under different names, in Hungary and Romania. That underlines the need for the European Community to do everything that it can to help those countries.

Sir Nicholas Bonsor: I agree with my hon. Friend. He probably saw the reports in today's newspapers that both the Czech Republic and Slovakia have had to reverse their demilitarisation policy and are trying to resuscitate their arms industries. Obviously, it is not in the interests of western Europe that that should happen. I hope that, by opening the door to proper non-military trade, we shall help both countries in their struggle to establish democracy and proper trading links with western Europe.

Mr. Marshall: My hon. Friend is right. The complaint that many of us have is that the European Community's trade with central Europe has not been open enough. The EC is all too eager to listen to the voice of the hon. Member for Rhondda when it deals with steel. It is unduly restrictive on fruit imports. It is more willing to export subsidised agricultural goods than to import from countries.

Mr. Rogers: They grow our own peaches in the Rhondda.

Mr. Marshall: They do lots of rotten things in the Rhondda, including electing the hon. Member. I apologise—we former Europeans should stick together.
The European Community forgets that it is in Europe's interests that democracy should continue to flourish in the countries of central Europe, otherwise there is a risk that they will return to dictatorship. The impact of that will extend far beyond those countries. We should have been more willing to show them the hand of friendship, to trade and invest with them. After the orders are implemented, I hope that we shall adopt a more positive role.
I welcome the fact that the know-how fund, which the hon. Member for Rhondda was willing to ridicule, has been warmly welcomed by the countries of central Europe. I also hope that our generosity will extend further and that soon we shall reach an agreement with the people of Albania, who have suffered more under communism than the people of any other country. The legacy handed down to the democrats of Albania has probably been the worst received by any democratic Government since the last war.
I commend the proposals and I shall have much pleasure in voting for them if the Opposition are foolish enough to press the motion to a Division.

Mr. Rogers: With the leave of the House, I should like to make a few more remarks.
I did not refer to the know-how fund, so perhaps the hon. Member for Hendon, South (Mr. Marshall) should consult his hon. Friends. The hon. Member for Stafford (Mr. Cash) mentioned that there were only a few Opposition Members present. Conservative Members who have spoken sounded like a couple of ferrets in a sack as they squabbled among themselves and screeched away. The hon. Member for Stafford could only whine continually. We had a year of that during the Maastricht debate last year.

Mr. Cash: Will the hon. Gentleman give way?

Mr. Rogers: I shall give way, but I hope that the hon. Gentleman will not whine any further.

Mr. Cash: The hon. Gentleman does not like much in the way of criticism. Many of us complimented him on the fact that he is now a member of the Labour Front-Bench team; I hope that he will improve on his performance today.

Mr. Rogers: I know that I have not made much of an impact, but I have been a member of the Labour Front-Bench team for many years, so the congratulations are a little slow. Two years ago, after a few years of shadowing Mr. Alan Clark, the former Minister of State for Defence Procurement, I was relieved of that job and joined the foreign affairs team. My brief does not cover Europe. The hon. Gentleman, with his single-minded obsession about that subject, probably did not notice that I have participated in debates on America, the far east, the United Nations and the North Atlantic Treaty Organisation, but not particularly in those on the European Community. I am afraid that my sights are set a little broader than his very narrow vision of what the world ought to be.
In one way, that is what the agreements are all about—the fact that in Europe it is now necessary to bring into the general family of democracies the ex-communist countries of eastern Europe. It is not just a matter of simple trade, although I have sounded warnings in saying that we have to consider possible dumping. I do not know whether that has been covered in the agreements sufficiently or in the negotiation, or any restrictive legislation attached to it. We have to be aware of the problems of agricultural products coming in. We saw the problems with Spain and Portugal's entry; there was a distortion of the Mediterranean agricultural products and huge sums of money were required to buy their entry into Europe. We do not want to have to do that again with the agricultural products of eastern Europe.
Outside that, the main reason for the agreements—the preamble sets it out—is to bring these countries into our family of democracies to extend the hand of friendship, to start setting up political dialogues, to move towards political structures where we can be compatible and can work together. If that means more than simply renegotiating Maastricht and repeating it like some refugee from Hari Krishna, there is more to it than those simple phrases that are continually muttered by the hon. Member for Stafford. We are moving towards something that is large and politically significant.
I want to give the Minister as much time as possible, so I shall stop there. We shall not divide the House on the issue, because we believe that it is important that the orders are passed. I just wish that the Minister's hon. Friends would give it some type of welcome instead of continually whining.

Mr. Douglas Hogg: With the leave of the House, I shall reply to the debate.
My hon. Friend the Member for Stafford (Mr. Cash) drew attention to the fact that there were hardly any Labour Back Benchers present during the debate, and he was right to do so. The reason why he was right to draw attention to that fact was that the debate could have been taken upstairs, but the Labour party insisted that it be taken on the Floor of the House. It is, I think, a sign of the gravity that Labour Members attach to the matter that, on his own admission, the hon. Member for Rhondda (Mr. Rogers), who spoke for the Opposition from the Front Bench, had picked up a brief but a few minutes prior to having spoken. The only Opposition Member who spoke in substance was the hon. Member for Linlithgow (Mr. Dalyell) and I will turn to his contribution in a moment. The hon. Member for Cynon Valley (Mrs. Clwyd), a Front-Bench spokesman, hopped up, trying to intervene in my speech. She then walked out and has not been here since.
What has happened is an abuse, because the matter could have been taken upstairs—the Labour party had no interest in it. There is, at the moment, but one Labour Back Bencher in the Chamber; the rest have played no part whatever in the debate. That is an abuse and the House needs to know that fact.
I now turn to what I understand to be the remarks of the hon. Member for Rhondda. [Interruption.] We have a second Labour Back Bencher here. I welcome the hon. Member for Liverpool, Garston (Mr. Loyden). He is going as well—no, he is not. He is sitting down. He is very welcome.
The hon. Member for Rhondda made two points—at least, I suppose that they were points. First, he grumbled about the dumping procedure. The hon. Gentleman would do well to look at the agreement. I commend article 30 with respect to dumping, because he will see that the general agreement on tariffs and trade-type safeguards prevail in those circumstances. The hon. Gentleman also embarked on a fairly extensive diatribe, criticising British industry and commerce in central and eastern Europe, wailing that we were not doing very well, to use the word that he likes to adopt.

Mr. Rogers: Whining.

Mr. Hogg: Whining is the word that the hon. Gentleman adopts. Whining certainly suits him. What a


pity that on that occasion he was not correct. It is perfectly true that the French and the Germans have done better, but it is equally true that if one contrasts 1993 with 1992 in the case of the four countries with which we are concerned, he will find that British exports increased by 40 per cent. Instead of whining, he might do well to bring those matters to the attention of the House.
My right hon. Friend the Member for Shropshire, North (Mr. Biffen) made an important contribution. I entirely agree with the substantive parts of what he had to say. I welcome, as he does, the process of enlargement. Yes, there are difficulties inherent in the economic fusion. Yes, it will transform the nature of the European Union. The point that, I suspect, Opposition Members who are present have not appreciated is that the enlargement of the European Union will work with the Government's, and not the Labour party's, perception of what the European Union should be like. Let us consider the identity of the countries that wish to join the European Union and bear in mind their history during the past 50 years. Countries that have had their sovereignty taken away from them by force are not likely willingly to surrender more of their sovereignty than they must to the centralising tendencies of the European Union. If one asks where the Labour party stands on the centralising tendencies of the European Union, one finds that the party is in favour of it, so I suspect that it will find that its new allies—our allies—will be of scant assistance to it.
The hon. Member for Linlithgow—I am sorry that he was shut in a church—made a very serious contribution, to which I do not have a complete answer, let me hasten to say. Essentially, what he described is a plague that we suffer from here. I regret to say that my local church in Lincolnshire was recently broken into and artefacts were stolen. That happens throughout the United Kingdom. It is especially worrying in the Czech Republic because of the great richness of artefacts there.
I can give one answer that is of some relevance. If the hon. Member for Linlithgow looks at article 97 of the agreement, he will see that it contains provisions for co-operation on the conservation of historical sites. That obviously could extend to addressing the type of problem about which he has spoken to the House.
The hon. Gentleman also raised several questions which, frankly, touch more on the responsibilities of my right hon. Friend the Secretary of State for National Heritage and, indeed, of my right hon. and learned Friend the Secretary of State for the Home Department than on my Department. I hope that he will forgive me if I draw his remarks to their attention, because I feel sure that they will wish to respond to what he said.

Mr. Dalyell: Contact with Interpol may be the only practical way of making an impact on that problem.

Mr. Hogg: Indeed, the contact with Interpol is what caused me to refer to the fact that my right hon. and learned Friend the Home Secretary might be the proper appropriate Minister to respond to the hon. Gentleman's comments.
My hon. Friends the Members for Chingford (Mr. Duncan Smith) and for Hendon, South (Mr. Marshall) concentrated on the merits of free trade, and I entirely agree with them. I am bound to say that my hon. Friend the Member for Chingford was wholly right when he commended the strategic requirement of restructuring of the industries, especially of the steel industry. I thought that again we heard the traditional and true voice of Labour from the hon. Member for Rhondda when he suggested that it was wrong to restructure British Steel in the early 1980s. Yet, as we were rightly reminded by my hon. Friend the Member for Hendon, South, the subsidies were running at £1 million a day. I heard the hon. Member for Nottingham, North (Mr. Allen) say, "It is peanuts." It is not peanuts. It is the type of thing that would bankrupt—

Mr. Graham Allen: Will the right hon. and learned Gentleman give way?

Mr. Hogg: I will not give way. I shall not give way because I have only one minute. I heard the hon. Gentleman say that it was peanuts. He may not have liked to be heard. I am not surprised at that because he was saying to the House that the whole policy of restructuring was wrong, and that the taxpayer should have continued to subsidise an industry that everyone else knew was bankrupt and inefficient, and is now one of the most—

It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Order [25 February].

Question agreed to.

Resolved,
That the draft European Communities (Definition of Treaties) (European Agreement establishing an Association between the European Communities and their Member States and the Republic of Bulgaria) Order 1994, which was laid before this House on 7th February, be approved.

Mr. DEPUTY SPEAKER then put the questions necessary to dispose of the other motions to do decided at that hour.

Resolved,
That the draft European Communities (Definition of Treaties) (European Agreement establishing an Association between the European Communities and their Member States and the Czech Republic) Order 1994, which was laid before this House on 7th February, be approved.

Resolved,
That the draft European Communities (Definition of Treaties) (European Agreement establishing an Association between the European Communities and their Member States and the Slovak Republic) Order 1994, which was laid before this House on 7th February, be approved.

Resolved,
That the draft European Communities (Definition of Treaties) (European Agreement establishing an Association between the European Communities and their Member States and Romania) Order 1994, which was laid before this House on 7th February, be approved.—[Mr Douglas Hogg.]

Representation of the People

The Minister of State, Home Office (Mr. Peter Lloyd): I beg to move,
That the draft Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1994, which was laid before this House on 17th February, be approved.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): I understand that with this it will be convenient to discuss at the same time the following motions:
That the draft European Parliamentary Elections (Amendment) Regulations 1994, which were laid before this House on 17th February, be approved.
That the draft European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 1994, which were laid before this House on 17th February, be approved.
That the draft Local Elections (Variation of Limits of Candidates' Election Expenses) (Northern Ireland) Order 1994, which was laid before this House on 17th February, be approved.

Mr. Lloyd: The first order increases the limits on candidates' election expenses at parliamentary elections in the United Kingdom and at local government elections in Great Britain to take account of inflation. The existing limits were set in March 1992. My right hon. and learned Friend the Home Secretary has power to vary the maxima where, in his view, there has been a change in the value of money and it seems reasonable to increase these limits to take account of the change.
The main political parties and the local authority associations have been consulted about the proposal to increase the limits. The Conservative party, the Labour party and the Liberal Democrats have all indicated their support for an increase to take account of inflation. The aim is to have the increases in place in good time for the local government elections in May and also for the outstanding parliamentary by-elections.
The draft European Parliamentary Elections (Amendment) Regulations 1994 perform two different functions. First, they increase the limits on candidates' election expenses at European parliamentary elections to take account of inflation. The existing limits have not changed since the previous European parliamentary general election in 1989.
Secondly, they apply for the purposes of European parliamentary elections in England and Wales an amendment made by the Education Act 1993 about the use of grant-maintained schools as polling stations. That amendment was made to ensure that returning officers continued to have the right to use, free of charge, rooms in grant-maintained schools once responsibility for funding such schools passed to new funding authorities.
The draft European Parliamentary Elections (Northern Ireland)(Amendment) Regulations 1994 increase the limits on candidates' election expenses at European parliamentary elections in Northern Ireland, while the draft Local Elections (Variation of Limits of Candidates' Election Expenses) (Northern Ireland) Order 1994 increases the limits at local elections in Northern Ireland. These increases correspond to the increases in Great Britain.
I hope that the House will approve all four orders.

Mr. Graham Allen: The four orders propose to raise the maximum limit of candidates' election expenses. They are very modest measures but,

whatever our views on the precise level of the limit, I hope that the whole House will agree that the principle of limiting expenditure on elections is fundamental and central to our democracy. Without it, we could move rapidly towards the excesses of the system in the United States where it appears that one has almost to be a millionaire before one can afford to run for office. That is true not only nationally but locally and in state elections. My hon. Friend the Member for Barnsley, Central (Mr. Ilsley) reminds me that, even in union elections, money talks.
In the United States, Ross Perot, a billionaire, entered the presidential contest because he felt that it was appropriate and, in Italy at the moment, there is a similar development with Berlusconi. I hope that this evening we are not encouraging such a phenomenon in British politics.
Of course, the principle of limits on expenditure applies only to local expenses. The local limits that we are debating contrast strongly with the free-for-all that exists at the national level. Local limits are, rightly, rigorously enforced and respected but national expenses are limitless and constitute a democratic deficit in the United Kingdom.
Political campaigning by individual candidates, as opposed to national party political machines, is an essential element in any healthy democratic system. Getting it right locally is all the more important today when the national political system is showing serious signs of ill health. There is undoubtedly, and rightly, a deep public cynicism about politics and politicians in general and of the House of Commons in particular.
The idea of democracy as a system of government by the people, for the people and of the people is an increasingly laughable characterisation of the over centralised, unaccountable and Executive-dominated system that passes for a democracy in this country. Labour has a wider democratic agenda to tackle the problem, but I shall not go into detail now because I know that you would bring me to order, Mr. Deputy Speaker. However, the orders highlight another issue.
All too often, contemporary political debate in this country is conducted through intermediaries, be they journalists, television reporters or assorted media pundits, but I do not blame them for that. We—in this place and at other political levels—are responsible for the fact that the importance of the relationship between candidates for office and their prospective electors has become an increasingly marginal relationship in the conduct of politics.
We believe that strengthening the local link and the local dialogue, as the orders do, is vital if we are to close the ever widening divide between politicians and the public. It is, therefore, more important than ever that those who are standing for public office as elected representatives have adequate resources during local election campaigns to project themselves locally as individuals and to publicise their own distinctive views and those of their party to the particular constituency electorates that they seek to represent. Candidates' election expenses at the parliamentary and European level are, in the main, geared entirely towards precisely that.
We believe, that in most respects, the current system of limiting a candidate's expenses is reasonable although hardly generous. In these days of direct mail, glossy literature and telephone canvassing, hon. Members may


feel that keeping down their expenses is rather like a boxer trying to make the weight limit—something that you may appreciate, Mr. Deputy Speaker.
In 1992, my own limit was £6,900 or thereabouts. It draws gasps of astonishment from people who campaign in other circles, such as those in pressure groups trying to mount a local or national campaign, those running a business or marketing particular products, and especially those from abroad. My American acquaintances in particular are staggered when they hear that there are such low limits on the amount that individual candidates can expend locally.
We believe that the local limits on election expenses should be uprated annually in line with inflation. Had the March 1986 expenses been linked to inflation, an additional £700 at today's prices would have been available to a parliamentary candidate in a borough constituency. The Minister mentioned linking these limits to inflation or catching up with inflation and, if he is listening, I ask him to comment on the possibility of a permanent link with inflation so that orders such as this are not necessary on an occasional basis and the amount that we can spend locally ratchet up with the retail prices index.
The real danger not covered in the orders is the fact that the role of local campaigning on the basis of a rough parity of party funds is fatally flawed because of the huge differences allowed at national level. The Labour party's Plant committee on electoral systems recently examined the problem and concluded:
Whilst the principle that wealthy candidates should not have undue advantages by access to greater funds still, in the main, applies at local level, it has become meaningless in terms of national expenditure.
Accompanied by a substantial increase by outside bodies in the promotion or rejection of a political party or its views, the concept of equality between parties is being steadily eroded.
As in so many things, the Conservatives are isolated on this matter. Of the parties present in the House this evening, only the Conservative party is opposed to national limits on expenditure. Surely the notion of political equality is absolutely fundamental to a democratic system.
More than 2,000 years ago, Aristotle noted:
The first and most truly so-called variety of democracy is that which is based on the principle of equality.
People may be unequal in the marketplace, much as some of us may regret that, but at the ballot box, they should be equal. We should do everything in the House to ensure that they stand as equals when they cast their vote.
The increase in expenditure at European elections is most welcome. I believe that every penny of that expenditure will be extremely helpful to Conservative candidates, who will need to explain the commitments in the European People's party manifesto. One commitment—I quote one of many possibilities—is
to move resolutely forward in furthering the process of European unification and integration.
No doubt many of the Conservative Members who have now vacated the Chamber will take great interest in that and in explaining to potential Conservative voters the possibility of a European defence force, a European immigration policy and a European constitution. No doubt the hon. Members who have left the Chamber are, at this very moment, rushing out to the electorate to notify them of those policy developments under the European People's party manifesto.
Perhaps we shall remember the orders going through the House this evening for the reason that this could be the last occasion on which the European parliamentary elections are fought on a first-past-the-post basis, which requires these limits. We shall have to consider new ways in which to devise expenditure limits for the next round of European elections after the elections in June.
Another concern about the orders is their failure to address the problems, again identified by the Labour party's Plant commission, of overspending the limits and their enforcement at local level. The commission said:
We consider it grossly unfair that an agent at constituency level, often a voluntary member of the party, is subject to legal control, and liable to a possible prison sentence for breaching the law, whilst a national party and outside bodies can freely spend and influence the electors, technically on a national basis, but in reality giving support for candidates of one political party.
That is wrong. There should be even-handedness in the way in which people are treated at national level, just as there is at local level. What is good for an individual, volunteer local party agent—the majority of us have such agents—should be good enough for a named person who should take responsibility for the legal implications of raising money and spending money at national level, if limits are breached. I state again for the record that Labour will legislate for national maximum spending limits, backed by legal sanctions, to ensure even-handedness.
We believe that the orders are a seriously missed opportunity to eliminate the anachronism of the differential in election expenses between candidates for borough constituencies and candidates for county constituencies. That, of course, applies to the United Kingdom and Northern Ireland elections and not to the European elections. The orders make that disparity greater. There is an increase in the expenses per elector in county constituency elections of 6.1 per cent.—from 4.9p per elector to 5.2p per elector. There is an increase of only 5.4 per cent. in the amount allocated per head to the electors in a borough constituency—from 3.7p to 3.9p per elector. The arguments that might once have justified that disparity have long since passed and it would be sensible for that disparity now to be removed. Again, I should be grateful if the Minister would comment on whether he feels that that matter should now be the subject of a serious review so that we can equalise the amounts that are given to borough constituency elections and to county constituency elections.
The orders are also faulty in that they fail to take account of the many new developments in election techniques. Those techniques are familiar to most of us and may be more familiar to those who have fought marginal seats. None the less, should the exemption of various capital items from the definition of expenses be considered? Those items might include the election headquarters, computers, printing machinery and telephone equipment. That would ensure that the maximum permitted election expenses are limited to items that are specifically directed at the elector, such as literature, the direct promotion of candidates, canvassing, direct mail and, perhaps, poster and press advertising.
Perhaps the Minister can tell us whether he would be receptive to such a change in the definition of election expenses. Perhaps he will clarify and pinpoint the services for which the money pays.
It is important that we state that Labour has argued since 1929 that there should be a fundamental review of the whole way in which we fund political parties. The subject


is currently being considered by the Select Committee on Home Affairs and, although it has a Conservative majority, I look forward to it proposing some radical reforms to party funding. I am pleased to welcome the Chairman of that Committee, the hon. and learned Member for Burton (Sir I. Lawrence), to our proceedings. He may care to comment at some point on the Committee's discussions on this important matter. I ask him to tell us, at the very least, whether the Committee may consider committing itself to the setting up of an independent electoral commission, along the lines of the Boundary Commission, to oversee the whole area of election expense regulation and to oblige all United Kingdom political parties to disclose in their annual accounts any donation from a single source above a particular limit, let us say £5,000 per calendar year. That is the minimum that we expect from the Select Committee and I should be pleased if the Chairman would comment on that or on any other point made so far if he can do so without giving away too many secrets.

Sir Ivan Lawrence: The inquiry into the funding of political parties is in a state of activity at the moment. The Committee has not yet come to a conclusion and it is too early for me to say what conclusions we shall come to on the points that the hon. Gentleman has raised.

Mr. Allen: That is most helpful. I look forward to the report. No doubt I shall reciprocate with a slightly more elaborate set of comments when I see the report. I wish the hon. and learned Gentleman well in drafting it.
Another relevant point is the limit on local government expenses being extended from £192 per local government candidate plus 3.8p per head to £205 per candidate plus 4p per head. We certainly welcome and support that part of the order, but we also believe that there is now a very strong case indeed for examining the maximum and determining whether we are allowing sufficient resources to local authority candidates to fight their corners effectively.
It is little use the House sometimes rather complacently saying that our turnouts are a lot greater than local government turnouts, when it is within the power of the House to assist candidates of all parties to spend a little more money contacting their electorates through additional literature or whatever other means they seek to employ. Turnouts in local government elections are too low, and we should do our bit to ensure that they are increased. However, it is incumbent upon the House to examine seriously whether the amount to which we limit local government candidates is sufficient to help local government achieve the turnouts, involvement and local interest that we would all like to see. Perhaps the Minister will comment not on the specific amount but on the broad dimension of funding that we allow local government candidates to use.
Similarly, in the case of by-elections, there should be a higher maximum for parliamentary and local elections. Do we really expect the Eastleigh, Rotherham, Dagenham and Barking by-elections to be fought effectively on current limits? Those events are of national interest and they will generate immense activity. In such circumstances, we might need to consider once more whether the admittedly more generous amounts that are allowed to people who are fighting by-elections could be considered yet again in the light of modern circumstances.
The measures were drafted some time ago; certainly before the advent of widespread computerisation, widespread direct mail, and the press conference every hour, it seems, in local by-elections. Perhaps, with future measures, we should take a step back to assess the level of expenditure and come up with a more realistic limit for local and parliamentary by-elections.
I have sought to place today's modest increases in expenses for candidates within the broader context of the enormous disparities within the levels of national party political funding which seriously undermine our democratic system. Recent allegations about the behaviour of certain Conservative councils suggest that the incestuous relationship between money and political power is alive and well in modern Britain. The problem, however, is not primarily that of illegality, important though it is to root out corruption from whatever source. The insidious problem is posed by large-scale, frequently clandestine but nevertheless legal financing of the governing party by the small wealthy minority who benefit directly from its tax policies. As we know, a number of the more substantial contributors to Conservative party funds—

Mr. Deputy Speaker: Order. I am sure that the hon. Gentleman is aware that the scope of the debate is narrow. Although he has been in order until now, the hon. Gentleman is beginning to stray beyond the bounds of the debate.

Mr. Allen: The very important point that I am trying to make is that people in our respective constituencies, be they in a constituency Labour party, a Conservative association, and whatever it is that the Liberal Democrats have, work extremely hard to raise money. That is why we have the limits. Such people work very hard to raise money through socials, jumble sales, coffee mornings and so on. That hard graft of local party politics goes on in order to raise money, and we rightly put ceilings on expenditure.
However, that has to stand in stark contrast with those who, at national level, are without any limit whatsoever and who, because they happen to be a foreign shipping magnate or a business man in Hong Kong, can donate amounts of money far in excess of that which any constituency has raised in 10 or 20 years.
That element of fairness must be conveyed. Those individuals have a far greater and disproportionate effect, even though they might be citizens of a foreign country working on behalf of a foreign business, than the hundreds of people—I pay tribute to workers in party politics, be they Labour or Conservative—who work day in and day out, voluntarily and without payment to make local parties the engine of local democracy. Without those local parties we would not have politics; we would just have top-down financed political parties. Sources of Conservative party finance raise several questions that I will not go into.
Although we support the orders, Opposition Members have a more radical agenda. The future Labour Government will remove the manifest unfairness of the existing system of party funding. We will legislate for limits on national spending, just as we have today on local spending. We will introduce state aid. We will ensure that party accounts are published. We will ban the funding of political parties by foreign individuals and foreign businesses. As part of our wider democratic agenda, we will work to create a level playing field for all political parties and candidates at local and national level, and we


will create a democratic system in which elections cannot be bought by wealthy vested interests but are won by the party with practical and imaginative ideas. We alone require no loaded dice. We alone will welcome that fair fight.

Mr. Robert Maclennan: I am not sure what the hon. Member for Nottingham, North (Mr. Allen) meant when he said, "We alone require no loaded dice." I do not know whether he sought to include or exclude the Liberal Democrats in that.
The hon. Gentleman laid out a wide canvas of reforms. I will not imitate that tonight, but suffice it to say that I hope that he will think it appropriate to seek cross-party agreement for any such reforms. Part of the essence of the hon. Gentleman's fair criticism of the Government is that they proceed in matters such as the reform of our electoral system with scant regard for the views of other parties on matters that are central to the efficacy of our democracy.

Mr. Allen: If I was not clear, let make it clear that the association of ideas on the national maximum is shared by the Liberal Democrats, the Labour party and, indeed, other parties, too. Only one party stands against a national maximum, and that is the one which needs a national maximum in order to make its own case, because it is incapable of making it on a level playing field.

Mr. Maclennan: I am grateful to the hon. Gentleman for that clarification. None the less, I would value the opportunity of a dialogue with him on this as on other matters, as, I am sure, would other parties represented in this House. I am prompted to say that because of what the hon. Gentleman said about the different expenditures in borough and county electorates.
I remember serving on the Speaker's Conference on electoral law some years ago, when this matter was considered very carefully. Clear evidence persuaded the conference that the expenditure necessarily incurred in campaigning in county elections was higher per head of the population than in borough constituencies.
In the view of the Speaker's Conference, that was sufficient to advocate the difference which these measures carry forward today. I do not have a dogmatic view on whether the difference is justified in contemporary circumstances, because I recognise that there have been substantial changes in the methods of campaigning at local level since the Speaker's Conference reported in the 1970s.
It would make sense to carry out a deep study of the actual costs of campaigning at parliamentary and European elections in the latter decade of this century in order to have some justification for the figures, which we normally uprate once in the lifetime of a Parliament, to see whether they are a proper reflection of the costs.
The figures are somewhat artificial. For example, they do not reflect the extent to which telephone canvassing may have become a core part of campaigning today. Nor do they reflect the difficulty in tracing expenditure on such campaigning.
From my experience of campaigning in a very scattered rural constituency, I must reflect that the nature of the expenditure incurred is very different from that incurred in a borough. The expenditure on petrol in driving from one

public meeting to another is considerable, and expenditure on advertising as many as four or five dozen meetings in different local newspapers is considerable because of present printing costs.
I know that, at the current levels of expenditure permitted by Parliament, it is difficult in such a rural area to do more than publish two, or at the most three, leaflets locally during an election campaign. I am not sure that that makes total sense in present times.

Mr. Allen: I wonder whether the hon. Gentleman is coming towards the conclusion that, if the limits are too low—there is a case for saying that these limits are too low—we are in danger of introducing a possible element of corruption into the local electoral process, because the temptation that may exist to exceed the limits is great where they may be over-rigorous.

Mr. Maclennan: I think that that is a risk. Certainly it is one that we should be aware of in looking at the realism of these measures in uprating the limits. I think that the Government have tied the uprating simply to the increase in the cost of living, but I do not think that there has been any detailed analytical work on the components of electioneering in bringing forward these measures.
Campaigning has been much more sophisticated recently. There is much more targeted campaigning locally. There is much more printing of letters which are directed to particular members of the electorate, in an attempt to have a more sensitive campaign than perhaps in the old days of the soapbox, which the Prime Minister, in his effort to get back to basics, employed—it must be said, with some success—at the last election.
Nonetheless, as we must be concerned about the evident cyclical decline in the number of our electors participating in elections, it is extremely important that election expenses which can be incurred at the local level should properly and fully reflect what it costs to run an informative campaign which allows candidates fully to display what they are offering to the public.
As I said, there is a certain artificiality about the limits today. Of course, the biggest artificiality of all is that to which the hon. Member for Nottingham, North referred—the tight control of local expenditure and the absence of control of national expenditure, which has a distorting effect on campaigning.
Although I am not one of those who believe that what happens locally does not matter much—electoral battles are fought on television and won by the party leaders; and, provided that we control the amount of television time and cover of the principal advocates in a national election, what goes on below that does not matter greatly—the extraordinary disproportion of expenditure nationally is something we need to examine in a fair and modern democracy. However, we cannot look at that matter within the ambit of these measures, which deal with a limited part of our democratic process.
I put it to the Government that the time has come to set up a Speaker's Conference to look at the disproportion between the tight control of local expenditure, which we are seeking modestly to raise tonight, and the absence of control of national expenditure. Undoubtedly, the Labour party has a clear view about what evidence it might submit to a Speaker's Conference. The Liberal Democrats might submit slightly different evidence, because there are


serious problems of control of national expenditure. We must take account of the practical difficulties of controlling national expenditure if we are to seek any change.

Mr. Andrew Mackinlay: I agree with the hon. Gentleman. Is there not an urgent need also to look at the consequences of the incumbency? Today, with the growth of regional and local media, Members of Parliament, local councillors and others have an increasing advantage over challenging candidates—that matter needs to be looked at—and generally there is no starting date in terms of knowing when an election campaign begins.

Mr. Maclennan: I agree with the hon. Gentleman. There is an advantage for the sitting tenant, whose record and history are known.

Mr. Mackinlay: I certainly hope they are.

Mr. Maclennan: In some cases it is an advantage, but it cannot be said that it is a universal advantage. The changeovers that occur suggest that it is not a sure-fire recipe for success at the polls. The hon. Gentleman is right: it is something that we should examine.
The opportunity for a new candidate to come forward and sell himself at an election on the basis of two or three little bits of paper seems to be inadequate. I do not want to see a huge increase in spending on elections, which would also militate against the challenge of small parties, new parties and local parties which are not well heeled and which have little to do with the merits of the candidature.

Mr. Allen: My hon. Friend the Member for Thurrock (Mr. Mackinlay) mentioned fixed-term Parliaments, which would have an interesting impact on local expenditure limits. If candidates were to know when an election was to take place, that might well affect the way that they plan their campaigns. Does the hon. Gentleman have a view on that?

Mr. Maclennan: As the hon. Gentleman knows, I am in favour of fixed Parliaments. However, that goes far beyond the ambit of the measures. Although it may be interesting for me to go down those avenues, I must confine myself strictly to what we are considering today.
I put it to the Minister that the time has come for a new look at these matters in the round. There is plenty of time before his party will have to face the electorate and nemesis.
The Government are therefore in an ideal position to take that step. In my experience, Speaker's Conferences tend to be dominated by the partisan views of those who participate in them. Nonetheless, they have served a purpose in the past of enabling evidence to be accumulated which can then go into the public domain and lead to a public debate. Such a debate preceded the alteration in the voting age, for example. Incidentally, Parliament rejected the recommendation of the Speaker's Conference on the voting age.
It is an appropriate process for considering how the matters should be taken forward. We should seek to modernise the system of the control of expenditure, and we should take account of the realities of campaigning in this day and age.

Mr. Peter Lloyd: The hon. Member for Nottingham, North (Mr. Allen) made a number of complaints about the orders, and he wanted them to do a lot of things which they cannot do. That is not merely because the orders do not contain the requisite material, but because they cannot do those things under the governing legislation. However, there were two or three points in particular upon which he asked my opinion.
The hon. Gentleman asked whether we could have increases automatically with inflation. I do not think that we can under the present law, because the Home Secretary is charged to come forward with regulations when he feels that it is appropriate to raise the expenses in line with the changing value of money. That must be his decision, and he has done that by consulting through his officials with the political parties. When there is a consensus—as there is on this occasion—he will introduce an order.
The hon. Gentleman also remarked on the disparity, as he saw it, between borough and county, with the latter having higher expenses. He thought that the differences were now out of date. That was an odd way of putting it, because the reason for the differences is geography, and that remains as it was. The distances in the hon. Gentleman's constituency, as compared with the constituency of the hon. Member for Caithness and Sutherland (Mr. Maclennan), are as they were previously.
There is no doubt that a large constituency, with long distances to travel and a spread population, involves greater expenses than a smaller, urban constituency. There is no reason why the differentials should be wrong now if they were right some years ago. They could be looked at, but they could be changed only if the Home Secretary introduced orders which did not raise the ceilings in county constituencies with inflation, as he was recommending the House did in borough constituencies.

Mr. Allen: The point that I was making in terms of the balance between counties and boroughs being slightly different now was based on the new campaigning techniques. There is greater emphasis on telephone calling and direct mail shots, and the physical moving of people and goods to different places around a constituency during a campaign has been somewhat diminished. The balance has shifted a little to more technological means of campaigning.
Will the Minister comment on the point about research, raised by the hon. Member for Caithness and Sutherland? Would it not be helpful to look into a lot of those things and for the Home Office to undertake some serious research into whether we have it right at the moment? That research could be even more serious than that which is undertaken already.

Mr. Lloyd: I will come to that point in a moment.
The hon. Member for Nottingham, North suggested that the ceilings on candidates' expenses were too low generally, and that he would like them raised. That would need legislation. I am not convinced that higher ceilings are needed. It is interesting that some 40 per cent. of Labour party candidates spend about 80 per cent. of what they could spend in elections. It does not appear that they are pressing on those ceilings.
There may be a need to look at the matter again. We last looked at it in conjunction with the other parties in 1987, when I did not have responsibility for these matters. The


hon. Gentleman knows that a series of study groups is dealing with aspects of voting and electioneering. There are six groups, which are drawing lessons from the general election. They have presented their draft reports, and those have either been sent to the political parties for comment in the past few days or are about to go out.
We do not ask that the matter of candidates' expenses should be looked at again. There are a large number of other issues which impinge upon those matters, and we will be interested to hear of any other issues when we meet with the political parties. It is sensible to take the matters forward by consensus because, at the very least, there needs to be agreement that certain aspects need to be looked at, rather than because of pressure from one party or another to make changes.
I am not sure that the hon. Member for Caithness and Sutherland is right when he says that we need a Speaker's Conference. I would much rather have meetings with the political parties on the basis of the wide-ranging reports which we are already putting forward. If additional issues arose, they could be examined to see whether it was agreed that certain aspects should be examined further—research, to use the hon. Gentleman's term.
The examinations could determine whether other discussions were needed, or whether there was not enough of a consensus to find a way forward. It would be much better to have meetings and discussions first. I do not want to rule anything out, but I would not like the hon. Gentleman to think that I was ruling anything in before the discussions.

Mr. Allen: While a Speaker's Conference may be going too far, and while many of us welcome the study groups and working groups which were established under the auspices of the Home Office, perhaps a middle way could be for an independent electoral commission, as I suggested. There may be matters which are to the benefit of the electors which may not necessarily be for the benefit of individual political parties, despite the fact that we always try to represent all our electors.

Mr. Lloyd: The outcome of the discussions between the political parties will be for wider debate. For example, we are consulting local authority associations, and other interested groups will want to comment. I do not believe that general, non-partisan interested groupings will be excluded in any way, but it would be sensible to take things stage by stage.
A great deal of work has been done by the study groups which have already reported. We should take that work forward and add any other matters that the political parties combined want to study further as well.
I will finish on the funding of parties nationally. That matter is outside the substance of this debate, but has been mentioned several times. The matter is being looked at by the Select Committee, and observations have been made by both hon. Members who took part in the debate. I am tempted to make some counter-observations of my own, but it is better if hon. Members keep within the rules of the debate. It would be sensible to wait until we knew the recommendations of the Select Committee.
I hope and expect from what has been said in this short debate that the House will give approval to the four statutory instruments.

Question put and agreed to.

Resolved,
That the draft Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1994, which was laid before this House on 17th February, be approved.

Resolved,
That the draft European Parliamentary Elections (Amendment) Regulations 1994, which were laid before this House on 17th February, be approved.—[Mr. Peter Lloyd.]

Resolved,
That the draft European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 1994, which were laid before this House on 17th February, be approved.—[Mr. Peter Lloyd.]

Resolved,
That the draft Local Elections (Variation of Limits of Candidates' Election Expenses) (Northern Ireland) Order 1994, which was laid before this House on 17th February, be approved.—[Mr. Peter Lloyd.]

Local Government Finance (Scotland)

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): I beg to move,
That the Local Government Finance (Scotland) Order 1994, a copy of which was laid before this House on 17th February, be approved.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): I understand that with this it will be convenient to discuss the following motion:
That the Revenue Support Grant (Scotland) Order 1994, a copy of which was laid before this House on 17th February, be approved.
This is the annual opportunity for the House to debate the Scottish local government finance settlement for the year ahead. It is common ground across the Chamber that it is an important debate for several reasons. Local authority services are clearly crucial to all those who receive them, be they the youngest or the oldest in our community.
The debate is also important because of the huge amount of money that is distributed under the orders that we are considering. The total sum involved is £5.3 billion. That represents about 40 per cent. of the total Scottish Office budget or, to put it another way, £1,034 for every man, woman and child in Scotland from the United Kingdom and business taxpayers. The figure of £1,034 compares to the English figure of £709 and the Welsh figure of £835. So the figure in Scotland is 46 per cent. higher than that in England and 24 per cent. higher than that in Wales.
The background to the two orders is provided in the reports on them, but I hope that it will be helpful to the House if I briefly summarise the position. I shall deal first with the main order, the Local Government Finance (Scotland) Order 1994. It represents the final stage of the 1994–95 settlement, details of which my right hon. Friend the Secretary of State first announced to the House on 30 November. He said that Government-supported expenditure—the total of grant-aided expenditure and the provision for loan and leasing charges—had been set at just less than £6,014 million and that aggregate external finance had been set at £5,272 million for next year. Those figures represent increases of 3.52 per cent. and 2.41 per cent. respectively on the 1993–94 figures, inclusive in both cases of the amounts being transferred to local authorities for the second year of their community care responsibilities.
The Local Government Finance (Scotland) Order 1994 deals with the distribution of aggregate external finance—AEF—for next year. As the report to the order explains, AEF has three components. The first is the provision for specific grants. For 1994–95, that provision is estimated at £421.5 million, and a breakdown of that estimate among the various specific grants is given in appendix B to the report.
The second component of AEF is the distributable amount of non-domestic rate income, which for next year has been set at £1,109 million. That estimate takes account of the 1994–95 rate poundages which my right hon. Friend also announced on 30 November. Those poundages, in turn, took into account a further reduction of £60 million as part of the Government's policy of harmonising business rate poundages north and south of the border.

Mr. Tam Dalyell: Do the figures take into account the costs already incurred of setting local government reform in motion?

Mr. Stewart: Yes. The order provides an additional £5 million for local government reorganisation. As the hon. Gentleman will appreciate, the major costs and savings will come in years subsequent to the order.

Mr. George Foulkes: It would be helpful if the Minister could elaborate on the exact basis on which the £5 million was calculated. It is important to know how much of the expenditure he envisages would take place in the next financial year. It would be helpful if he could set out briefly—I think that we have plenty of time—the types of expenditure that he expects to be incurred in the coming financial year.

Mr. Stewart: Certainly. As the hon. Gentleman will know, we sent out a circular to Scottish local authorities asking for an estimate of the costs of local government reorganisation in the forthcoming year. The costs mainly relate to information technology. As I said in answer to the hon. Member for Linlithgow (Mr. Dalyell), the main costs and savings will come in future years. We thought it right to allow a small increase in expenditure for costs in 1994–95. As the hon. Gentleman will appreciate, most costs will come in years thereafter.

Mr. Foulkes: We are talking about 1994–95, which goes on, as I understand it, right until the end of March 1995. It seems to me that £5 million is a small amount. From the discussions in which the Minister has been involved in the Standing Committee considering the Local Government etc. (Scotland) Bill, it seems likely that by the beginning of 1995, local authorities—whatever structure we ultimately decide—will be involved in fairly substantial expenditure around February and March 1995. I wonder whether information has been made available to the local authorities on which they can make reasonable judgments about what the expenditure is likely to be.

Mr. Stewart: Of course there will be substantial extra expenditure in the financial year 1995–96. The expenditure in 1994–95—the financial year that we are dealing with this evening—is likely to be very limited. No local authority suggests that it will incur other than preparatory expenditure. The hon. Gentleman is correct that, in 1995–96 and 1996–97, the picture will be different.
I informed the House last year that, with the agreement of the Convention of Scottish Local Authorities, it was proposed to distribute non-domestic rate income to regional and islands authorities only. That meant that district councils would receive their AEF support solely in the form of revenue support grant and specific grants. I am happy to say that those arrangements have been accepted by all involved and it is proposed to continue them for next year.
The third component of AEF is revenue support grant, which for 1994–95 totals £3,741.5 million. A detailed explanation of how AEF for next year has been distributed to individual local authorities is contained in the report to the order. It may be helpful to the House if I briefly summarise the procedure, the object of which is to equalise both for variations in authorities' assessed need to incur expenditure and for their tax base. There are broadly two stages in the process.

Mr. George Robertson: Broadly?

Mr. Stewart: There are exactly two stages in the process. The first stage is to equalise differences in authorities' grant-aided expenditure assessments—GAEs—as determined by the client group methodology. That methodology, which is reviewed regularly, is agreed with COSLA in the distribution committee of the working party on local government finance. A little more than £1,303 million of the AEF total is used to equalise differences in GAE assessments.
The second stage of the procedure is to equalise for differences in each authority's tax base—in other words, their ability to raise revenue locally. The balance of AEF remaining after equalising for differences in the GAE assessments is allocated to authorities in proportion to the number of council tax band D equivalent properties in each authority area. The sum of £3,927 million is distributed in that way.
The principle underlying the distribution procedure is that if all authorities spent at the level of GAE assessment, they should all be able to set the same level of council tax. In practice, there is often a significant variation in the levels of tax because some authorities decide to spend above GAE and others below. Variations in tax levels, however, are not the result of the aggregate external finance distribution system being used to reward or to penalise certain authorities. Any claims of that sort made in previous debates—I am sure that they will not be made today—betray a lack of understanding of the system and the extent to which COSLA is fully consulted about the mechanisms that I have summarised.

Mr. Gordon McMaster: Is not taking the council band alone into account a rather crude way to assess the tax base of an area and the impact on local authority expenditure? That crude formula alone will not take into account the fact that an area with many houses in the council band might also have been affected by unemployment or have a high level of poverty.

Mr. Stewart: The hon. Gentleman's argument is incorrect because of the two-stage process. Unemployment is an indicator in relation to the provision of a number of services and that is set out in detail in the distribution formula. If there were only one stage, the hon. Gentleman would be correct, but, because of the needs part of the procedure, indicators such as unemployment and deprivation are fully taken into account in the distribution of the grant.

Mr. Phil Gallie: Can my hon. Friend advise me whether COSLA has offered any constructive arguments on a change to the formula which would improve it, if that were possible?

Mr. Stewart: The formula is constantly reviewed with COSLA. It is perhaps inevitable that authorities do not always wholly agree with the consequences of the formula because they are affected in different ways.
I certainly pay tribute to the very professional expertise commanded by the distribution committee of COSLA and the Scottish Office, as hon. Members who have studied the client group methodology in detail will be the first to attest. I see that the hon. Member for Glasgow, Garscadden (Mr. Dewar) is agreeing with me and I am sure that he studied it year in and year out when he was the shadow Secretary of State for Scotland. The methodology is extremely

technical and sophisticated and I pay tribute to those who work very hard to improve it in the light of continuing representations.

Mr. Dalyell: Before we leave the subject of the professional expertise of COSLA, to which the Minister rightly pays tribute, if it has so much professional expertise, why does the Scottish Office challenge its estimates for costs of up to £720 million for local government reform? Does he accept that that COSLA figure was put together not by a group of Opposition politicians, but by precisely the type of experts to whom he is paying tribute; for example, David Chynoweth, who was president of the Chartered Institute of Public Finance and Administration last year? Is it not dangerous to give such fulsome praise to COSLA's expertise—praise which is justified, in my opinion—but to say that it has its sums all wrong on another aspect of local government reform? The Government cannot have it both ways.

Mr. Stewart: I do not accept that figure. When I paid tribute to the convention's technical expertise in one area, I do not think that anyone would imply that I necessarily meant that we accepted every figure that it produced on every subject under the sun. I merely said that the distribution formula is extremely complex and sophisticated and I paid due and proper tribute to those who worked very hard to ensure that the formula reflects changing circumstances; it changes from year to year.

Mr. Gallie: I apologise to my hon. Friend for intervening again. If I heard him aright, he not only complimented those who were technically involved from COSLA, but also people from the Scottish Office. That office has come up with different figures for local government reform to COSLA, so the argument is balanced. Perhaps my hon. Friend should acknowledge that and advise Opposition Members of that fact.

Mr. Stewart: My hon. Friend is right, as always.
We are considering the distribution of the grant, which is done according to a formula agreed by the distribution committee. Both Scottish Office and COSLA officials do much extremely technical work. That does not mean that COSLA, by agreeing the distribution, necessarily agrees with the total, which is a different matter. COSLA is entitled to its view on that.
I do not think for a moment that the second order is controversial. The Revenue Support Grant (Scotland) Order 1994 redetermines the amount of revenue support grant payable to each Scottish authority for each of the years 1990–91, 1991–92 and 1992–93. Those are the three years covered by an agreement with COSLA to adjust, either up or down, the level of RSG payable to each authority in the light of any variations between the estimate of non-domestic rate income and the amount collected.
Hon. Members will appreciate, I am sure, that the amount can vary from the estimate because of changes in buildings, empty buildings and so forth. The introduction of pooling of non-domestic rate income—NDRI—from 1 April 1993 removed the need for the agreement to continue beyond 1992–93. With pooling, adjustments to the level of NDRI are made administratively.
The order provides for the level of RSG for 1990–91 to be increased by £26.6 million; for the level of grant for 1991–92 to be increased by £39.7 million; and for the level of grant for 1992–93 to be reduced by £34.5 million. All


those adjustments are necessary in the light of the latest returns of non-domestic rate income collected by authorities for the three years in question. Overall, as hon. Members will doubtless be delighted to hear, the order provides for a net additional payment of £31.8 million to authorities. Clearly, there are swings and roundabouts as far as individual authorities are concerned.

Mr. John McFall: And if the hon. Member has anything to do with it, Eastwood will always be on the roundabout.

Mr. Stewart: I do not think that it is.
I do not believe that the second order is controversial in any way. It has been fully discussed with COSLA. The settlement to Scottish local authorities provided for in the main order is entirely realistic, given the present low level of inflation, the Government's approach to public sector pay and the public expenditure situation and I commend both orders to the House.

Mr. George Robertson: This will be an interesting evening, because we have started the debate earlier than anticipated. Hon. Members will therefore have a good opportunity to discuss the orders.
We can also reflect on the fact that, although the Secretary of State has come to join us, he still manages to duck out of dealing with local government issues, as he did during Scottish Question Time last week. At the weekend, it was noticeable, however, that when he was debating with, or should I say when he was being attacked by, Conservative councillors, at a conference he managed a few remarks about the conduct of the Standing Committee considering the Local Government etc. (Scotland) Bill, although he has not even popped his head around the door of the Committee. He is, presumably, receiving detailed reports from the Parliamentary Under-Secretary, the hon. Member for Eastwood (Mr. Stewart). Great debate and dissent are undoubtedly caused by them.

Mr. Gallie: rose—

Mr. Robertson: Perhaps the hon. Member for Ayr (Mr. Gallie) has occasionally bumped into the Secretary of State in the Corridor and has put down a few amendments as a result.

Mr. Gallie: Given the hon. Member's words of welcome to the Secretary of State, it would be churlish if Conservative Members did not mention the presence of the hon. Member for Glasgow, Garscadden (Mr. Dewar) on the Opposition Front Bench. I am sure that the hon. Member for Hamilton (Mr. Robertson) will benefit greatly from his hon. Friend's advice on, and sound knowledge of, local government.

Mr. Robertson: I have no doubt that if the hon. Member for Ayr turned his mind to it, he could turn that intervention into an amendment for the Committee tomorrow, because his ingenuity seems to have absolutely no limit.
My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) is, of course, welcome to join us. A trip down memory lane is never bad for people. I am sure that he will enjoy the debate, just as he always enjoyed the previous ones. In fact, he is probably one of the few people who enjoy such debates.

Mr. Archy Kirkwood: He is the only person.

Mr. Robertson: Yes, that may well be true.
My hon. Friend the Member for Garscadden is certainly welcome, because he never shirked or dodged the column in dealing with important issues, especially those concerned with local government.
I must admit that many a heart dropped when a study of the Order Paper revealed that the House intended to discuss the Local Government Finance (Scotland) Order 1994 and the Revenue Support Grant (Scotland) Order 1994. Frankly, the Minister with responsibility for local government has just revealed the deathlessness of the prose and the complexity of the concepts as he explained different components of the aggregate external finance levels compared with the Government's supported expenditure levels.
That explanation left the House of Commons more than cold in its appreciation. It also has the unfortunate effect of leaving the Government in the advantageous position of putting their figures forward as the truth—something which anyone with half a mind on the past would automatically dismiss.
The Minister told us that this is a good settlement, but he has said that every single year, just as his predecessors have in the past 15 years. It is no more true this year than it was in the previous ones. Why should the Minister change the script; after all it is recycled year on year? A few different civil servants may be involved and Ministers may go round in circles, but, each year, we are given the same speech about more cash being available for local councils and that, as a result, council tax, poll tax bills and rate levels should fall across Scotland. As the Opposition know only too well, Ministers are not telling the whole truth.
The truth, buried deep in the figures, is not just a matter of interpreting dry, obscure statistical complexities, but means money, which comes from the pockets of the people of Scotland. They are expected to shell out more money and more taxes. All those taxes are new ones, which are a direct result of this incompetent Government. Whatever Ministers say tonight—they have sold us this stale, unconvincing justification year on year—the minimum estimated effect of the orders will be an extra 10 per cent. on council tax bills across Scotland. The Convention of Scottish Local Authorities has authoritatively estimated that that is equivalent to £1.20 a week on average council tax bills.

Mr. Stewart: Can the hon. Member therefore explain why the biggest Labour district council in Scotland, Glasgow, has just announced that it will reduce its council tax by 3.8 per cent?

Mr. Robertson: As the Minister has said, there will obviously be swings and roundabouts. Because of the differentials involved and a number of other factors that apply, there will be differences of view about the figures. But the estimate, published this morning by the same professional officials whom the Minister has praised up to now, means an extra £1.20 a week on every council tax bills. That is equivalent to an additional 10 per cent. on top of all the other added expenditure which results from the Government's policies.

Mr. George Kynoch: Would the hon. Member care to ponder on the fact that another Labour-controlled regional council, Grampian, has said that it intends to freeze its council tax levels? I wonder whether he attaches a lot of credibility to COSLA' s figures.

Mr. Robertson: There are not many Conservative Members present, but I hope that they will come up with examples of the good housekeeping of individual Labour local authorities, which have been able to act in that manner in the face of the settlement and the circumstances dictated by Ministers. Those Labour local authorities have been able to do that because of the sheer professionalism of their approach. I shall explain, however, that the figures mean that it will be difficult for those authorities to uphold that behaviour.

Mr. Alex Salmond: May I take the hon. Member's remarks as something of a compliment to the Scottish National party's financial convenor of Grampian region?

Mr. Robertson: The hon. Gentleman can take it any way he wants.
The Government say that the aggregate external finance level will be up 2 per cent. this year, but when one takes away transferred moneys from the other purses of Government—from the careers service, which has been transferred, and the care in the community cash, which has been transferred to local authorities from the Department of Social Security—that level is down to 0.97 per cent., on the Government's own estimates. That is an increase of less than 1 per cent. in the aggregate external finance, the totality of Government support to local authorities.
That is the estimate before one takes into account inflation. If one takes away the Government's own estimate for inflation, which is published each year in the Red Book, as it was in the unified Budget, Scottish local councils budgets will be down this year by 2.91 per cent. That is almost 3 per cent. down not just on their current budgets but on those for last year. That means that, based on the figures for last year and not even on those on which the budgets that they reasonably proposed for the following year were based, a total of £148.8 million will be taken out of local authority budgets. In other words, almost £150 million will be taken out of local government budgets which are already stretched to breaking point. The consequence will be simple, brutal and unavoidable.

Mr. Kynoch: rose—

Mr. Robertson: I should like to make more progress, as Ministers would say, before I give way again.
The consequences of that reduction will be job losses, service reductions and an increase in council tax. All that is due to a direct, dictated, ordered, forced and even desired consequence of the Government's direction from the centre. At least £1.20, on average, will be added to council tax bills.
That will be on top of an extra £10 a week which, from April, every family will have to pay for the broken promises on national taxation for which the Government are responsible, and on top of the cost of VAT on fuel, which will come into effect on 1 April. More taxes will be set on more taxes. All of them are the price to be paid by taxpayers as a penalty for the incompetence and the deceit of the Conservative party, which told the people two years ago at the election that it would reduce taxes year on year.
The simple message behind those complicated figures is, "The Tories pick your pockets and then waste the money that they have taken". I wondered whether I could draw an analogy with Robin Hood, who stole from the rich to give to the poor, or with the sheriff of Nottingham, who stole from the poor to give to the rich. But the Government are acting like "East End Hood", who steals money from everybody and then loses it. That is the reality of the additional taxes which the Government are now imposing. They are picking the pockets of the Scottish people with extra taxes all the time. In return, we get less: fewer services and jobs, and longer dole queues.
The bulk of the 300,000 people employed in local government in Scotland face a year in which the Government estimate that inflation will run at 3 per cent. The Chancellor has published that estimate in the Red Book. Where is the justice in saying that people face 3 per cent. inflation plus all the tax increases that will be heaped on them, but no increase in pay? It is yet another gift from this high-promising Government.
The Government say that all that is fiction and exaggeration. They say that they have provided local councils with a pot of gold and that tax increases, service cuts and job losses are down to individual local council decisions. I say that that is hogwash.
There are few Tory local authorities, but Stirling and Kyle and Carrick district councils are flagship Tory authorities which perform the role of shop windows for the Tory councils of tomorrow. Two weeks ago, Stirling district council fixed its council tax level, reducing it by between £34 and £100. In its headline making that announcement, the local newspaper, the Stirling Observer, made it clear what the price was. It said:
Jobs are lost to pay for tax cuts".
The loss of at least 18 jobs and huge increases in charges will be the price paid by those in Stirling district who will enjoy a reduction in council tax.
The hon. Member for Stirling (Mr. Forsyth) does not participate in many Scottish debates. He does not enjoy a walk down memory lane and, as a begetter of the poll tax, there are few highways and byways in Scottish debates which he would like to visit. But the same edition of the Stirling Observer quoted him as saying:
The councillors and officials of Stirling district must be the toast of my constituents tonight".
Some celebration for the 18 people who were to lose their jobs as a consequence of that decision, those who would pay up to 200 per cent. more to let a hall in Stirling district, or those who would have to pay more to bury their dead in the area because of the rise in burial charges.
The Stirling Observer has not taken a partisan view. Indeed, the hon. Member for Stirling has received much favourable publicity from it over the years. But in its editorial opinion that week, Mr. Alan Rennie said:
Perhaps the district council should line up the 18 people whose jobs are to be axed and explain to us and them why they are surplus to requirements. Then line up the people who are expected to assume many of their functions overnight.
I'm fed up with those who treat ordinary people as pawns in a political game or as mere figures in an accountancy exercise. There may be champagne corks popping in Conservative party HQ but elsewhere this budget is like a glass of flat beer.
Interestingly, the story did not end there. The following week, the saga continued in the editorial opinion. Mr. Rennie told his readers:
One of the first calls to my office on Wednesday morning came from MP Michael Forsyth, who felt that I had been unclear in my criticism.


How touchy of the Minister of State, Department of Employment. Anyway, Mr. Rennie analysed the comments and other points put to him and concluded:
So I am going to stick to my guns. It's not the Observer that is playing politics. That charge lies at the door of the ruling Conservative group on Stirling District Council. And it is my readers who will suffer the consequences. Just wait and see.
Mr. Rennie adequately makes the point about a council that has contracted out its legal services and handed them over to Professor Ross Harper in Glasgow, with a loss of jobs in the district and a legal challenge for unfair dismissal; contracted out its grass-cutting service with disastrous consequences; and spent £60,000 on designing a new logo and corporate identity for the district council. I heard it described as:
a Lego man for a loco council".
The council has made itself a national laughing stock as a consequence.
Given that grimy, unattractive shop window for Tory councils, it is small wonder that there are so few Tory councils around to talk about. But there is one more—the district council based on Ayr: Kyle and Carrick. It is still strong and is run on the Stirling model of champagne-popping, job-slashing, charge-increasing and standard-dropping councils. But Kyle and Carrick council is slightly more sinister at the edge because it now flouts the law as it seeks to break agreements that were freely entered into and contracts that were legally adopted. It seeks to dump existing contracts and the people who were party to them, and to sack loyal local workers and bring in contractors from Spain to handle the cleansing contract for the area. Loyal, decent, hard-working human beings will be dumped by those Tory fanatics—the loony right of Scottish politics—as they try to squeeze through some European loophole and illegally break signed contracts.
That example, not the statistics of the aggregate external finance, is the true face of the Tory party in dealing with local government.

Mr. Gallie: Will the hon. Gentleman advise the House how Kyle and Carrick district council has flouted any law, contractual or other? Is he aware that an announcement has only just been placed in the Journal of the European Communities and that no contracts have been placed? Certainly, no contract has been placed with a Spanish company, yet the hon. Gentleman seems to have the inside story. Can he put up the evidence? If not, he should come off that track.

Mr. Robertson: The hon. Gentleman has been involved in all those shenanigans and probably knows more than anyone else. Instead of posing questions, he would be well advised to provide answers. The House and the electors of Kyle and Carrick need to know whether those contracts, which were freely entered into, will be broken.

Mr. Foulkes: Is my hon. Friend aware that Kyle and Carrick district council announced that it would cancel a contract that had one to two years to run with the in-house tenderer for cleansing and refuse? Once that was announced, it was revealed that, prior to the announcement, five separate meetings had taken place between Provost Gibson Macdonald and its officials and the Spanish company, FOCSA. Does that not smell of a rat and some kind of collusion or corruption?

Mr. Robertson: The words "rat" and "smell" certainly come to mind. There is little doubt that something funny is going on in Kyle and Carrick district council. There is certainly an intention to break a contract freely entered into with local workers. No doubt the law courts will ultimately adjudicate on whether the law has been broken or whether the council has found a loophole that will allow it to break the law. What is clear, however, is that there has been a breach of faith with local people who are adequately providing a service but are going to be mercilessly dumped because of blind ideology.

Mr. Gallie: It is courteous of the hon. Gentleman to allow me to intervene again. He has suggested that something funny is going on in Kyle and Carrick district council. I read a newspaper article at the weekend which, under the headline "Spend, Spend, Spend", said that the council tax was being frozen. There is certainly something going on—it is very good news for the people of Kyle and Carrick.

Mr. Robertson: It is difficult to know what to make of that. If the hon. Gentleman is adopting "Spend, Spend, Spend" as his slogan—

Mr. Gallie: It is not my slogan.

Mr. Robertson: All I can tell the hon. Gentleman is what we know about the council's attitude to agreements and contracts, and to its local people, who will draw their own conclusions. There is little doubt that the Conservative party is setting out its stall in the area, and it is a wholly unattractive one.
The Tory principles—higher taxes, broken promises, fewer jobs and bargain basement services—adopted by the Stalinists of the Scottish Conservative party—

Mr. Stewart: Ha, ha!

Mr. Robertson: The Tory Stalinists are not going to stop there. Those who dissent from the one nation, one party idea get the chop. The hon. Member for Eastwood may roar with laughter, but I should like to draw his attention once again to the case of Colonel Frank Saunders. That should wipe the smile off even his face.

Mr. Stewart: I have heard the story before. I have great respect for Colonel Saunders, whom I have known for a long time. The hon. Gentleman talks of the Stalinist tendency. Who does he have in mind as Stalin?

Mr. Robertson: That is an open question—which could be answered by anyone who cares to fill in a postcard and send it to St. Andrew's house. [HON. MEMBERS: "The Minister is Stalin."] Well, it is certainly not the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton). I cannot imagine him leading that tendency, although he might be playing the part of a quiet Beria. If so, he has not yet disclosed the fact.
As we all know, Colonel Frank Saunders has nothing to do with chickens of either the fried or the cowardly variety. He serves as leader of the Tories on Central regional council. He is therefore a man of no small distinction. He lives in Stirling district and is a constituent of the hon. Member for Stirling. He has been an active Tory for more than 52 years, and a councillor in Stirling for more than 30 years. Yet the colonel said, when the tap on the shoulder came in the night, in words evocative of eastern Europe:
After being told of the decision I asked if I was being dismissed because I had failed as a councillor. But I was told that


it was because I didn't support the local authority reform proposal.
So he bit the dust, because he did not agree with the new architecture.
I took a self-denying ordinance to the effect that I would not quote Councillor Brian Meek again. In a recent article he said that he wanted to be paid lineage if he was to continue to be quoted endlessly in the House. I fear that I must quote him again, however. Councillor Meek of Edinburgh district council had this to say about Colonel Saunders:
He was deselected. Because, it seems, Frank Saunders disagrees with the Government's plan to reform local councils, particularly as they affect Central region, he has been booted out. I support the move to one-tier authorities. Nevertheless I am concerned that the price of speaking one's mind"—

Madam Deputy Speaker (Dame Janet Fookes): Order. According to my information, we are discussing financial matters tonight, not the reform of local government.

Mr. Robertson: Of course you are right, Madam Deputy Speaker. Colonel Saunders would agree with you: he agrees with most of what the Conservative party is doing. He would probably agree with the orders that we are debating. We are talking about the financial base for local government in Scotland—a huge figure which the Minister outlined in his speech. It is extremely pertinent to this debate to know the policies of the councillors who will spend the money that Parliament, presumably, will vote through at the end of this debate. I assure you, Madam Deputy Speaker, that Colonel Saunders' fate is of immediate relevance to these orders.
Councillor Brian Meek went on to say—

Mr. Stewart: Will the hon. Gentleman give way?

Mr. Robertson: First, it is worth quoting Councillor Meek, a close friend and buddy of the Minister. [Interruption.] I use the word "buddy" in its broadest possible sense. He said:
Are we not big enough, not magnanimous enough to recognise the sincerity and integrity of Frank Saunders, an active member for 52 years? Are we supposed to be speaking puppets?
Perhaps the Minister would like to answer that question.

Mr. Stewart: I am sure that the hon. Gentleman is just about to go on to the case of the four Labour councillors who have been suspended from the party in Monklands.

Mr. Robertson: They have not been deselected as candidates. The party is entitled to its own disciplinary procedures, but we are talking about a man with 52 years' service to the Tory party, 30 of them as a councillor. He is a man of enormous distinction in Scottish local government and he has been deselected. I am quoting here the views of another Conservative, not my own views.

Madam Deputy Speaker: Order. The hon. Gentleman is now well off the point. He has made his point, and we must move on.

Mr. Robertson: I bow to your guidance, Madam Deputy Speaker. I should add that Colonel Saunders, from whom I am about to depart, is not alone in his disenchantment with this butchery.

Mr. Raymond S. Robertson: Will the hon. Gentleman give way?

Mr. Robertson: I trust that the hon. Gentleman does not intend to trespass against what Madam Deputy Speaker has just said.

Mr. Raymond S. Robertson: Far from it. The hon. Gentleman has championed the cause of deselected councillors. Will he come to my constituency and champion the cause of Labour councillor David Falconer, who has just been deselected for not toeing the party policy line?

Mr. Robertson: The hon. Gentleman will have to tell us what party policy was involved—

Madam Deputy Speaker: Order. I do not wish to know. Please continue.

Mr. Robertson: I think that you, Madam Deputy Speaker, have saved the hon. Gentleman from the embarrassment of the irrelevance of his comparison. I notice that even he did not try to defend the decision to boot out Colonel Saunders.
The disenchantment with the butchery of Scottish local government all across Scotland is not confined to the leader of the Tory group on Central regional council. Many people are now realising that this gerrymandered upheaval, done without the consensus of, or demand by, the people, without a review and on a crazy and impractical timetable, will cost them a packet. The new gerrymander tax is going to be substantial—yet another tax on the people of Scotland for Tory convenience. We do not have to take my word for that; it might be thought slightly partisan, despite the fact that it is accurate and dispassionate. Let us look at the report in yesterday's Scotland on Sunday about the Association of Scottish Conservative Councillors. Kenny Farquharson's article begins:
Scotland's Tory councillors yesterday sent a warning to Scottish Secretary Ian Lang that he has badly underestimated the price to be paid for the reorganisation of local government.
It is not the Labour party, or even the suspect professionals of COSLA, who are telling the Government that they have underestimated the costs, but Tory councillors themselves. That is extremely relevant and pertinent. The Secretary of State for Scotland is quoted as saying:
The Labour leadership has lost the argument on the costs of reform".
He went on to describe our claims as "extraordinary and wild". The Secretary of State was told by the Tory councillors—

Mr. Gallie: On a point of order, Madam Deputy Speaker. We seem now to be discussing the cost of the reform of local government in Scotland rather than the revenue support grant. Could you give me guidance on that?

Madam Deputy Speaker: I am making the presumption that the hon. Member for Hamilton (Mr. Robertson) is connecting the two.

Mr. Robertson: Absolutely. If the hon. Member for Ayr had bothered to listen to the speech of the Minister, he would realise that there is specific inclusion in the orders for the transition costs to move into the new local authority structure. What I am saying is not only relevant but highly


inconvenient for the hon. Gentleman if he chooses to believe the sort of nonsense that is peddled by his Front Bench.
It is interesting that the councillors are being quite specific. They said in Scotland on Sunday:
Yesterday's meeting of Tory councillors said Lang was deceiving himself over the true cost.
The article then quotes Jim Evans, the chairman of Berwickshire district council and the association's new chairman, as saying:
We are a little bit more cynical than the Government about these things.
The Government's centrepiece—their plan for reorganising local government based on saving public money—was torn into tatters by a Conservative councillor speaking at the weekend, but speaking the truth. All he is telling Ministers is what everybody else in Scotland knows and what we have been telling the Minister for weeks since the White Paper was published; it will cost more than the Government says, and substantially more at that.
I can remember the words of Mr. Arthur Bell—another bosom buddy of the Minister—

Mr. Stewart: A party colleague.

Mr. Robertson: A party colleague of the Minister. He is a senior Conservative and has carried the blue flag of the Conservative party in Lanarkshire—no mean feat—for many years. Last November, addressing a seminar at Strathclyde university's business school and speaking in relation to the claims made by Ministers on savings at that time, which they put in the range of £120 million to £196 million, Mr. Bell said:
If anyone came to me with a gap as wide as this I would be amazed. I would not wish to make major changes in my business without being more accurate.
Mr. Bell and the Association of Scottish Conservative Councillors are all saying it, and are saying it loud and clear.
I look around me for Conservatives who are willing to speak the inconvenient truth, who are willing to run the same risks as Colonel Frank Saunders and spell out to the country precisely the consequences of what the Government are doing. I have yet another example. I think that it would be exhibit C in this case. It is an article by the right hon. Member for Shropshire, North (Mr. Biffen), published in The Guardian—of all newspapers—on Saturday, and entitled
Colonel Blimp and the rural revolt".
I do not know who that could be describing, but the article is about local government reorganisation south of the border, which is different from that north of the border, because the south was at least given a review and people there are arguing publicly about it. The timetable has gone completely haywire and very little is happening as a consequence. The right hon. Member for Shropshire, North, who, after all, was a Cabinet Minister—Chief Secretary to the Treasury and, later, Leader of the House—before departing office, said:
In the first instance there is no popular demand for such changes, and much cynicism about the supposed benefits and certain increase in costs.
There we have it, authoritatively from the words of the Tory's themselves, the real insiders, a former Chief Secretary to the Treasury; a prominent Lanarkshire Conservative supporter; and from the Association of Scottish Conservative Councillors. All said that the Government have got it wrong and that the savings that

they are projecting are implausible, contrived, hopelessly optimistic and, indeed, plain fantasy. So, too, are the figures that are supposedly included in the orders for the transition costs of reorganisation. This year, £5 million is allowed, with £25 million next year and a final £15 million in 1996–97.
Those figures are unrealistic and wholly inadequate for what is being asked of councils today. After a month in Committee—I know that we are not allowed to debate in the Chamber what is happening in Committee—we still do not know what the boundaries will be for the new councils that the Government intend to set up, because a deliberate Government decision has been taken to leave as many of those issues as possible wide open for the future. We are only 13 months away from the first elections to these authorities, yet nobody in Scotland definitely knows what all the boundaries will be or even how many councils will actually—

Madam Deputy Speaker: Order. There is a boundary in here of what is relevant, and the hon. Gentleman is trespassing over it.

Mr. Robertson: I fear that the figures for the transition costs of local government reorganisation are pretty fundamental to the orders, because if they are as seriously underestimated as we believe that they are—as all the documentary evidence shows that they are—the settlement that has been made to Scottish local authorities this year will seriously embarrass them, cause a loss of jobs, increase council tax levels and mean a reduction in services.
It is extremely important that we try to establish here and now precisely what the Government are playing at and how they can pretend to have finalised the details of local government reorganisation to the extent that councils are told that they must live within £5 million this year for transition costs in a reorganisation that is now hopelessly ambitious—although ambitious is the wrong word to use—in its timetable and construction. There is only one way in which the Government can be right: if they are to start dismissing large numbers of people in local authorities. The Secretary of State was quoted as saying at the weekend, again in Scotland on Sunday:
Of course, there will be transitional costs. But by far the larger part of those costs will result from the rationalisation of staff. So the greater the short term transitional costs, the greater the long-term savings from single-tier councils.
What he is saying is that the more employees that councils sack, the greater will be the longer-term benefits. That is the only way in which the circle can be squared. But to do so, he will have deliberately to challenge the assurance that was given by the Prime Minister last October to Councillor Charles Gray, when he said:
We do not anticipate that local government reform will result in widespread job losses and redundancies.
The Government now have a serious obligation to people in Scotland to explain how these fantastic savings will be made in the existing structure without the kind of job losses that the Secretary of State appeared to be signalling at a conference at the weekend. The COSLA figures that were produced quite clearly demonstrate—

Mr. Kynoch: Will the hon. Gentleman give way?

Mr. Robertson: No, I wish to end my speech so that other hon. Members may contribute. It would be unfair if I went on for too much longer.
The COSLA study on costs, as my hon. Friend the Member for Linlithgow (Mr. Dalyell) said, is compiled by the same experts, who, it would appear, are the only ones apart from the Minister's advisers who understand the detail of what he was talking about this evening. Those people, who received his plaudits and congratulations, are the same people who have put together this authoritative study on the cost of local government reorganisation. It cannot be applauded on the one hand and dismissed whole-heartedly on the other. Their estimates are based on experience. They are based on hard-headed experience of what has happened in previous reorganisations. Their analysis is based on reality, not on what is convenient for the present Government. People will listen to them before they will listen to any Minister saying anything. Even the mid-point of their analysis reveals half a billion pounds of transition costs, and precious little in the way of long-term savings.
This whole exercise in butchering local government means a bad bargain for the Scottish taxpayer, which, moreover, is completely unnecessary—all for a local government structure that no one believes will last. It has neither the durability nor the stability to survive the test of time.

Mr. Dalyell: Did my hon. Friend observe that, when he made assertions that many of us consider to be correct, the Minister just shook his head? Will my hon. Friend invite the Minister to explain the methodology of the Scottish Office, and why he thinks that my hon. Friend is wrong about this important matter?

Mr. Robertson: The Minister's silence is due to the irrefutability of the arguments that have been advanced. If Ministers were expected actually to tell the truth about the methodology involved in transition costs—thinking of a figure and halving it—and in savings—thinking of an even more implausible figure and doubling it—I do not think that their credibility would be very great. I rest my case, as I know that my hon. Friend does, on the words of the new chairman of the Association of Scottish Conservative Councillors: he said that even he, one of the faithful, felt cynical about what the Government were doing.

Mr. Kynoch: Will the hon. Gentleman give way?

Mr. Robertson: I am bringing my remarks to a conclusion. The hon. Gentleman should wait his turn.
The orders are hopelessly inadequate for Scottish local councils. They will lead to cuts in services, the destruction of jobs, the lowering of standards and increases in council tax bills across the country. At the end of the debate, what Councillor Brian Meek so prosaically called the "speaking puppets" may well deliver a majority: that is a reasonable assumption and forecast—much more accurate than some of the Government's forecasts. I suggest, however, that in the Scottish regional elections on 5 May, when the people have a chance to make their voices heard in ballot boxes across the country, the Government will receive a profoundly different message.

Mr. Bill Walker: We have just heard the hon. Member for Hamilton (Mr. Robertson) allegedly addressing the order. In truth, he did everything but that.

First, he tried to deal with the situation on the basis of personalities in Scottish politics. That was all right, as long as he was dealing with personalities who, in his eyes, wore Conservative colours; but, as soon as he began to discuss personalities who sailed under the Labour flag, he did not want to know anything about it.
For instance, the hon. Gentleman did not believe that people could be expelled, or simply taken off the list of candidates, because they did not conform to policy. He says that that has happened to one Conservative candidate. As he and I know—as everyone in political life knows—it is possible to fall foul of the establishment from time to time; hon. Members sitting behind him have experienced that problem, and it has been experienced by at least one Conservative Member, whom I know very well. There is nothing new about that.
Why did the hon. Gentleman use that point in evidence this evening, of all evenings? We are discussing a revenue support grant figure that is far in excess of inflation, but the hon. Gentleman failed to mention that; all he did was talk about people and personalities. Rather than dealing with the issue before the House, he spent his time trying to become the darling of the Scottish media by naming names, among other things. It is called tactical and strategic thinking.
The man is an amateur. We very much miss the real contribution made by the hon. Member for Glasgow, Garscadden (Mr. Dewar), who would have done tonight what he has always done—analyse the content of the order, and explain why he did not agree with it. His speeches down the years have always been worth listening to, because we could always be sure that he had done his homework thoroughly, and he would always unearth aspects that required consideration. That was not the case tonight; the hon. Member for Hamilton has done a sad disservice to both his party and the people of Scotland.
It is about time we began to think about this impostor—for that is what the hon. Gentleman is. He is no longer wearing the mantle of the Labour party, and carrying on its crusade; he is now conducting a personal campaign that he hopes will give him publicity and media attention. He hopes that we will call him the great saviour of the Labour party in Scotland.
I have news for him: I think that exactly the opposite will happen. I think that both those sitting behind him and the Scottish media will realise that there is nothing there. The hon. Gentleman has not done his homework on the revenue support grant order; if he had, he would recognise—as I have—the massive increase for three authorities in my constituency—Perth and Kinross, Angus district and Tayside region.
I accept that authorities are never given enough money, but we have a very low real inflation rate at present. Moreover, Tayside region has received a substantial increase, from £171,379,938 in 1990–91 to £245,157,226 in 1992–93.

Mr. Kynoch: Unfortunately, the hon. Member for Hamilton (Mr. Robertson) would not let me intervene earlier; I suspect that he would not have liked my intervention, because it was not very convenient. I believe that 60 per cent. of local government expenditure is on labour. If the Government's guidelines on self-financing wage increases are adhered to, significantly more will be available in the revenue support grant than the hon. Gentleman has suggested.

Mr. Walker: I thank my hon. Friend for that telling intervention.
I am always interested and amused by Labour's claim to be the party that will somehow give the people of Scotland better value for money. Labour does not address the key issue: can services be provided more cost-effectively so that people receive a better service having paid less?
As has been clearly demonstrated in many other contexts—especially as a result of privatisation—when attitudes are changed, it is possible to achieve substantial reductions in manpower, for example. I hope that the objective of all employers is to secure the best possible value for customers—in this instance, for electors and council tax payers.
I do not apologise for hoping that employers will do that, and will achieve better results. Unquestionably, when there is a move from labour-intensive to more capital-intensive activities, we expect a reduction in revenue costs. That is the real objective of heavy investment in new, modern capital equipment, which is taking place throughout the western world so that it can be competitive. I have never understood why people should think that local government is any different in that regard.
As for the benefits received by Angus district and by Perth and Kinross, the 1990–91 figure for Angus was £3,995,821; it has risen to £8,282,606. The figure for Perth and Kinross has risen from £5,301,063 to £10,459,773. Of course I acknowledge that that contains an element of inflation, along with additional duties and responsibilities.
Having taken all that into account, I believe that central taxation, which is paid for anyway by the taxpayer, contributes in real terms more than the rate of inflation towards the running of the three authorities in which I am interested. Consequently, I have no problem in supporting the order, and I hope that the Labour Members who will speak will address it.

Mr. George Foulkes: I am grateful for the opportunity to speak in the debate, although fellow members of the Committee that is considering the Local Government etc. (Scotland) Bill might think that it is taking masochism a little too far. We sit all day until late at night on Tuesday and Thursday, and I see some familiar faces in the Chamber today, including that of the hon. Member for Tayside, North (Mr. Walker). We are taking masochism to a new form of supermasochism. Those of us who have been involved in local government, who are concerned about it and committed to it, and are anxious to ensure that services continue, believe that it is important to participate in today's important debate.
I want to advance a serious and, I hope, non-partisan argument before I make some of my more partisan comments. I am sure that the Minister, having received representations from local government, will appreciate that there is a feeling that dealing with local government expenditure on a year-to-year basis does not allow for proper planning. I know that it may be understood that the sum that a local authority receives for the following year will be similar to that of the previous year, plus allowances for inflation. There is a growing feeling, which I hope has got through to the Minister and the Department of the Environment, that a rolling programme for capital and revenue expenditure would be sensible. A rolling

programme exists, to some extent, for capital expenditure. It would be helpful and useful if such a programme were considered for revenue expenditure, although I understand that that would always be provisional and subject to all sorts of qualifications. I hope that the Minister will consider that and ensure that there is more long-term planning in local government. That was my non-partisan argument, to which I hope that the Minister will respond.
Some services will be under tremendous pressure as a result of the revenue support grant settlement and the other related order. I am glad to see my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) here today. He knows that I used to be the chairman of the Lothian regional education committee. He was one of our excellent teachers before he came to Parliament to waste his time.—[HON. MEMBERS: "Oh!"]—like the rest of us.

Mr. Robert Hughes: My hon. Friend has inadvertently given the impression that my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) is wasting his time here. That is not the case. He is doing an excellent job and his constituents should be aware of that.

Mr. Foulkes: I am sorry—I chose my words incorrectly. I am doubly grateful to my hon. Friend the Member for Aberdeen, North (Mr. Hughes). All three of us are experiencing the frustrations of Opposition. My hon. Friend the Member for Leith will find it much more satisfactory after we have won the next general election and we are in power and pressing forward with new developments. I know that he experiences the frustration that I feel.
It worries me that our expectations of the education system and its provisions, not only in Lothian but across Scotland, have been depressed in the past 15 years by the Government. When I was chairman of the education committee, we were expanding education, reducing the staff-pupil ratio and developing community schools. We had just developed Wester Hailes school, the Wester Hailes education centre and Deans community school. We were talking about increasing resources and keeping schools across the region open for 24 hours a day, seven days a week. We wanted the improvements to be spread throughout the region and community and we had a great vision for education.

Mr. Gallie: I assume that the hon. Gentleman is referring to the late 1970s. Was not the rate support grant considerably cut in 1978 and 1979 by the then Government?

Mr. Foulkes: I can recall that period very well: we were in the process of expanding community schools in Lothian region. The resources were made available and, compared with today, those were rosy days. I have noticed that my former right hon. Friend the Member for Leeds, East, now Lord Healey, is appearing on posters. We think back on his days as Chancellor as the golden days. What is happening today, particularly in education, causes great concern.
I do not know whether it is happening in other constituencies, but school buildings in my constituency are being maintained and painted less and less frequently. Their maintenance has been substantially reduced—that is poor long-term planning. The planning is being done on a short-term basis, which creates tremendous problems for school buildings. Regional councils are under pressure to


close schools. That pressure comes from the Minister and the Scottish Office Education Department, the name of which has been changed for reasons that I do not understand—I used to call it the Scottish Education Department. I live and work in Strathclyde region. The pressure is on that local authority to close schools, to save money and to cut its revenue.
Let me take a random example from the south side of Ayr. When three or four primary schools in the region were half empty and, under pressure from central Government, Strathclyde regional authority attempted to rationalise its procedures and proposed to close Castlehill primary school, everyone, including the hon. Member for Ayr (Mr. Gallie), was up in arms. When that happened I also complained that the concerns of the parents should be met. Strathclyde region is being put under pressure by the Government to make savings—that subject relates to today's debate. We need to realise the consequences. Sometimes I feel that, when we consider the orders, the documents of the Convention of Scottish Local Authorities and the figures, we do not understand what they mean on the ground. They mean fewer and less well-maintained schools. Pressure is being put on half empty schools to close.
I want to deal with the subject of the staff levels, which will cause my hon. Friend the Member for Leith to think back. The hon. Member for Kincardine and Deeside (Mr. Kynoch), in a well-timed intervention, said that he welcomed the concept of self-financing wage increases. What does that mean? It means that if, for example, teachers claim for and receive a wage increase above the level of inflation, which they richly deserve—I hope that they receive a sensible and reasonable increase—the regional council will have to find the money elsewhere. Inevitably, that means either saving money on school buildings and maintenance, which means cuts and closing more schools, or sacking and cutting the number of teachers. That will result in an increase in the staff-pupil ratio or a reduction in the number of specialist teachers. The Government cannot have it both ways. If we have self-financing wage increases, it will mean that people will be sacked or that buildings will not be properly maintained.

Mr. Kynoch: Has the hon. Gentleman heard of increasing efficiencies in other sectors where there may be scope for savings? Cuts need not be made in productive sectors.

Mr. Foulkes: We considered that matter. I spent some time pressing the staff of Lothian regional council to find efficiencies. If the hon. Gentleman understands the education budget, he will know that more than half of it goes on teacher salaries. A substantial amount goes on other important staff such as janitors, who are responsible for the security of the buildings—I am sure that the hon. Gentleman would not want to do away with them—school cleaners, and a range of jobs. All efficiency savings that could have been made have been made.
In my experience in the education service, no further savings can be made without cutting back the direct provision of services.

Mr. Bill Walker: With the hon. Gentleman's extensive knowledge—it certainly occurred during his period when he was in charge of those matters at Lothian region—he

will know that one way to make changes and savings is to close schools in which the numbers of pupils fall below economic levels. The other way, which is often the result of that, is not to replace teachers who retire or who give up for whatever reason, and often that can be linked to the changes in school numbers and so on. The hon. Gentleman must know that there are always ways to do such things.

Mr. Foulkes: Let us take the two examples that hon. Gentleman mentions, because he is helpfully participating in the debate. Let us take closing schools. Of course that is one way to do it, but those who are most vociferous about proposals to close schools are Conservative Members of Parliament. No one could have shouted louder than the hon. Member for Ayr about the closure of Castlehill school, yet it happened as the direct result of the policies of the Conservative Government. That is the hypocrisy that we see—

Mr. John McAllion: Two-faced.

Mr. Foulkes: I am not sure whether I am allowed to say that. That is the two-faced attitude that we see from Conservative Members.

Mr. Gallie: Will the hon. Gentleman give way?

Mr. Foulkes: I am already dealing with one intervention.
Let us take the second point, about retirement. If one has a single-stream primary school with seven classes of about 30 pupils and one teacher retires at the age of 60, one has to replace that teacher. One cannot have composite classes all the way up of 35 or 36 pupils. In secondary schools, if one gets rid of specialist teachers one reduces the quality of education. There is a limit, therefore, and that limit on savings has not just been reached, but passed.

Mr. Gallie: The hon. Gentleman must realise that my main objection to the way in which Castlehill school was closed was that it was not half-empty—it had about 70 per cent. occupancy of pupils. Strathclyde region took an overnight decision. One moment it promised new build, the next minute it came up with a closure. That is not sound management. On another point, the hon. Gentleman—

Mr. Foulkes: The hon. Gentleman is wrong. I said in Committee that I find it difficult to deal with the hon. Gentleman because he makes so many misstatements. He says things that just are not true and it is very difficult to deal with people who do that. Strathclyde went through a long consultative process because there are a number of—

Mr. Gallie: On a point of order, Madam Deputy Speaker. I certainly did not make a statement that was not true, in spite of the words of the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes).

Madam Deputy Speaker: That is not a point of order for the Chair because the Chair is not responsible for the accuracy of the content of speeches or remarks made.

Mr. Foulkes: I am grateful, Madam Deputy Speaker.

Mr. McAllion: Perhaps it is just as well.

Mr. Foulkes: It is just as well, as my hon. Friend the Member for Dundee, East (Mr. McAllion) rightly said.
A number of schools were half-empty. Forehill was half-empty, Castlehill was substantially empty and


Kincadeston was substantially empty. Kincadeston is a modern school, built only a few years ago. It was suggested that Castlehill, which has old buildings, should be closed down because its facilities are totally inadequate. That was proposed and there was full consultation. I opposed the closure, but there was full consultation. I opposed it because I am in favour of spending more money on education and therefore there was not anything contradictory in opposing it, but the hon. Member for Ayr, who also opposed it, wants to cut the money for education but at the same time to keep all those schools open. As the Member for Tayside, North rightly said, one cannot have it both ways.

Mr. McMaster: The hon. Member for Tayside, North (Mr. Walker) gave us a couple of what my hon. Friend described as "useful examples" of ways in which savings could be made—closing down schools and not replacing teachers who had retired. Is not it the case that if those self-same arguments that there is always room for efficiency and closure were applied to the national health service, he might find that one of the results is the closure of Meigle hospital?

Mr. Foulkes: That is absolutely right. I am grateful to my hon. Friend because his logic is impeccable.

Mr. Bill Walke: rose—

Mr. Foulkes: I give way to the hon. Member for Tayside, North for the last time.

Mr. Walker: If the hon. Gentleman examined carefully my record on school closures in north Tayside, he would find that I have supported schools that had to be closed. Equally, I have not supported the closure of hospitals that should not be closed. Those are entirely different things. My record shows that, equally, I have supported hospitals that had to be closed. I have supported closures. The hon. Gentleman should do his homework more carefully.

Mr. Foulkes: There seems to be a dispute there but, looking at it completely impartially, the logic seems to be on the side of my hon. Friend the Member for Paisley, South (Mr. McMaster).
I shall now move off the subject of education and deal with two other sectors in which the settlement about which we are speaking today is actually reduced. The Minister said that there will be no quarrel about the settlement. I have a quarrel about two sectors, the first of which is roads and transportation, funding for which decreases by 5·8 per cent.

Mr. Stewart: What I said was that I did not think that there would be any quarrel about the second order. I of course accept that hon. Members can take different views on the overall settlement.

Mr. Foulkes: I am grateful.
Roads and transport decrease by 5·8 per cent. The Minister must know that there is a huge pressure on from Strathclyde region, and from Ayrshire especially, with regard—the hon. Member for Ayr actually wants it as well—to the building of the M77, the Ayr road link between the top of the A77 at the moment and the M77, the spur that is missing. Most of that is capital expenditure and must be taken into the capital account, but some of it is revenue expenditure that needs to be provided to get design work done in Strathclyde region, or by outside contractors if the

Government press it that way. My fear is that if funding for the roads department of Strathclyde is cut substantially, the much-needed design work on vital projects such as the Ayr link road, the Girvan bypass and the new Cumnock bypass will be delayed and the projects will be delayed.
When we look at the figures we need, time and time again, to translate them into reality on the ground. That is what Conservative Members do not do. They go along with the Government. They vote blindly, like sheep, with the Government, day in, day out, week in, week out, month in, mouth out, year in, year out, without realising the consequences of what they are doing. Then they go to their constituencies and say, "Of course we want those roads to be built, of course we want those schools to stay open" when they are the very people who voted for settlements that inevitably mean that that will not happen.
My next subject is domestic sewage. That does not sound like the most exciting subject to talk about at any time, but it is vital, as you know and as we all know, Madam Deputy Speaker. The domestic sewage settlement is decreasing by 6 per cent. Let us, once again, think of the consequences of our action. Every year, the European Community tells us that many beaches are no longer usable, do not satisfy the standards, are filthy and polluted. In Ayrshire we were told that beaches at Maidens, Turnberry, Girvan in my constituency, Troon, Ayr and Prestwick do not satisfy the required standards. We all jump up and down and say that it is disgraceful—and it is absolutely disgraceful. In some cases, raw sewage is being pumped out into the sea and in others housing and other much-needed developments cannot take place because there are not adequate sewerage facilities.
Yet again, all the Conservative Members who complain—

Mr. Gallie: Will the hon. Gentleman give way?

Mr. Foulkes: The hon. Gentleman has intervened far too often. He can try to make his own speech later.
All the Conservative Members who complain about those dirty, polluted beaches come to the House and are unwilling to vote the money and agree the settlement that is necessary to do something about those beaches. Again, their two-faced attitude becomes apparent.
The Convention of Scottish Local Authorities has made representations about the additional burdens imposed by central Government. Central Government always say that local government is required to do this or that because a new Act has been passed. Central Government willed the ends but would not will the means, and that is especially true now with care in the community.
Care in the community has resulted in a substantial extra burden being placed on local authorities, which are the lead bodies in this respect. A certain amount of money has been transferred but nowhere near enough. I shall not give any details but I shall mention a case that was drawn to my attention at the weekend. Strathclyde region was unable to provide the money necessary for a severely disabled person in my constituency. As a result, the extra money that would have come from the independent living fund, a subject raised by my hon. Friend the Member for Falkirk, East (Mr. Connarty) during Prime Minister's Question Time only week, is not available because Strathclyde region does not have the resources to trigger the money from the ILF. It means that millions of pounds that could be coming from the ILF will not be available


because of a lack of resources. Care in the community is just one sphere where an additional burden has been imposed by central Government because the necessary money is not being made available.
I have dealt with regional council matters but now wish to mention two district councils in my area. I know that the Minister believes that Cumnock and Doon Valley district council has done an excellent job with industrial development, a sphere in which few local authorities become greatly involved. However, unemployment in the Cumnock and Sanquhar travel-to-work area is now the highest in mainland Britain—it stands at 19·1 per cent.—so Cumnock and Doon Valley district council has made it its business to become involved in industrial development. I am concerned that no special attention is being given to Cumnock and Doon Valley's efforts.
The Minister visited Cumnock and Doon Valley and, I concede, made some sympathetic noises but, when it comes to the settlement at the end of the year, those sympathetic noises are not translated into money to enable the local authority to do all that it wishes. The authority has a substantial industrial development programme, which it wishes to continue.
My hon. Friend the Member for Hamilton (Mr. Robertson) referred to Kyle and Carrick district council. He mentioned what one of our colleagues in Committee called the competition for the gold medal in the loony olympics between Stirling and Kyle and Carrick to see which authority could come up with the craziest right-wing idea. I have heard a bit about what is happening in Stirling, but I believe that Kyle and Carrick is in the lead.
I shall not spell out in great detail the case to which my hon. Friend the Member for Hamilton referred but it has created tremendous concern locally, and not only among Labour Members and supporters or people who might be natural Labour sympathisers. There is deep concern throughout the community, including the business community, about the fact that a legal contract for cleansing and refuse disposal into which Kyle and Carrick entered, and which still has between one and two years to run—it was an in-house tender—is about to be torn up by the district council.
The authority has advertised in European journals and elsewhere but we then found that there have been secret meetings with representatives of a Spanish cleansing company. That is sinister. Why did the meetings take place? Why was Provost Gibson Macdonald privately meeting representatives of FOCSA if not to start talking about tearing up the in-house contract and putting the job out to tender? I see no other reason why the provost and, on at least one occasion, the chief executive, should meet a Spanish-based company unless it was to put pressure on the district council, or come to an agreement with it, to tear up the contract. There is to be a demonstration in Ayr on 19 March and I shall certainly be there, supporting the unions in their legitimate legal challenge to Kyle and Carrick.
The hon. Member for Ayr referred to the headline "Spend, Spend, Spend", which appeared in one of the local newspapers. It certainly describes what Kyle and Carrick Tories have decided to do. There are legitimate reasons for some of the authority's expenditure but, at a time when people are being asked to accept reductions—or, at the

very best, a standstill—in their wages, would not it have been far better for Kyle and Carrick district council to do what the Labour group suggested and reduce the council tax and the burden on ordinary council tax payers rather than proceeding with some of its more extravagant proposals? I hope that the Minister will examine the issue seriously because I do not believe that he would wish Kyle and Carrick to go ahead with some of its more outrageous proposals if the alternative is a reduction in council tax. After all, he has been recommending that other local authorities consider every possible way of reducing the council tax, so why would not he do the same to Kyle and Carrick?
I am deeply worried about the two orders. They would cause a further reduction in services, a further deterioration in local government building stock, more job losses and a deterioration in the services that are so important to many people. I hope that my hon. Friends will vote against them for those reasons.

Mr. George Kynoch: My contribution will be brief. Listening to Labour Members, one would imagine that the Government were cutting their support to local government rather than providing a significant increase.
We must remember that inflation is very low. As I said in an intervention on my hon. Friend the Member for Tayside, North (Mr. Walker), 60 per cent. of local government expenditure goes on employees' wages; so if we could hold wage costs level by whatever means—through efficiency and improvements or by making savings elsewhere—the whole revenue support grant contribution could be spread over 40 per cent. of the expenditure. If we take the current rate of inflation to be the full 2·5 per cent., we would need an increase of only 1 per cent. to cover the total. In other words, there has been a significant increase in the contribution to local government expenditure.
I agree with my hon. Friend the Member for Tayside, North that in Kincardine and Deeside—

Mr. George Robertson: rose—

Mr. Kynoch: I shall give way in a minute; the hon. Gentleman kept me waiting.
I agree with my hon. Friend the Member for Tayside, North that there had been an increase of almost 6 per cent. in the revenue support grant settlement for Kincardine and Deeside. The same is true for Grampian region, which has also received a significant increase. Both councils have said that they intend to maintain the present council tax level.

Mr. George Robertson: Why does the hon. Gentleman not believe the Chancellor's estimate of inflation, as stated in the Red Book, at 3·5 per cent.?

Mr. Kynoch: I base what I am saying about expenditure on the current rate of inflation. I believe that my right hon. and learned Friend the Chancellor, quite rightly, has been prudent and sensible in his projections. It may well be that inflation is a little higher; hon. Members will appreciate the fact that if it applies to only 40 per cent. of local government expenditure, it accounts for only 40 per cent. of the increase. Mathematically, it does not make a lot of difference.
Local councillors must play a significant part in ensuring that their local taxpayers get value for money. I give the example of Kincardine and Deeside district council which faced a 4·2 per cent. increase in the draft budget for next year. The councillors simply said to the executives of the council, "This will not do. We have to get the budget level. We cannot stand a council tax increase at this time." Surprise, surprise, the second draft budget came in significantly less, to the extent that council tax will be held level. Whether it is to the credit of the Scottish National party.. as the hon. Member for Banff and Buchan (Mr. Salmond) claims, or whether it has rather more to do with the fact that we face regional council elections this year, Grampian regional council, miraculously in election year, has managed to come in with a level council tax.
I now turn to the move towards the unified business rate. Non-domestic rates play a part in the equation about which we are talking tonight. I very much welcome the fact that the variance between Scotland and England, which was 64·6 per cent. in 1990–91, will go down to 14·7 per cent. in 1994–95. Even that percentage does not tell the whole story because it is an average. Kincardine and Deeside, Gordon, Moray, Berwickshire, Tweeddale, Orkney and Shetland are all level with England. Their rates cushion the fact that the rate in Glasgow is still significantly higher than the average, with a rate poundage of 52·9p, which compares with the average in England of 42·3p. The message is loud and clear. The trend continues throughout Strathclyde, where the variances are between 19 per cent. and 20 per cent. from the English average. The clear message is, therefore, that Labour councils are not as good at getting their business rates down.

Mr. Brian Wilson: Does the hon. Gentleman live in such a fantasy world that he seriously believes that there are comparable social and economic problems in Glasgow and in the other authorities to which he alludes?

Mr. Kynoch: I certainly believe that the affairs of that council can be managed as efficiently as those of other councils. In other cities that have problems similar to those of Glasgow, there is a lower rate poundage. That proves the point.

Mr. McMaster: In an intervention, I asked the Minister about the way in which aggregate finance was calculated. He told me that indicators such as poverty, deprivation and poor housing were taken into account. As the Government are responsible for about 88 per cent. of the money that local authorities receive, why will the hon. Gentleman not allow local authorities to apply the same logic?

Mr. Kynoch: I believe that I correctly heard my hon. Friend the Minister say that the formula for the revenue support grant split was discussed jointly by the Scottish Office and COSLA. COSLA must, therefore, shoulder its responsibility for the way in which the split has come about.
I summarise by saying that I believe that the level of revenue support grant that has been applied in the order is more than adequate if councils use their best initiative to ensure that, on the labour side, they keep settlements this year to a level that can be self-financing. They therefore have plenty left with the remaining 40 per cent. to fund services so that there are no cuts whatever.

Mr. Archy Kirkwood: The hon. Member for Kincardine and Deeside (Mr. Kynoch), to whom I listened with interest, is totally unrealistic if he expects local authorities in Scotland to be able to cope with the wage demands that they will receive this year and to make the savings that he suggested were possible. The evidence coming from south of the border, where some of the settlements are a little further on than they are in Scotland, suggests that that is hope above expectation. The hon. Gentleman also forgets that the local government settlements are nationally negotiated; they are not in the hands of individual councils because the rates are set nationally, as the hon. Gentleman knows as well as I do. It is, therefore, a bit ridiculous realistically to expect such savings.
I should like to make one or two general observations before turning to some of the detail of the orders. Over many years, I have become convinced of the need to look a bit more closely at the way in which we finance local government. The existing system is not transparent. It is very difficult—I say this neutrally—for ordinary council tax payers to determine for their own purposes exactly where the responsibility for some of the increases that they have to pay lies. If that is true, the system needs to be looked at again. It is now descending into a war of attrition between local government and central Government, in which each side tries to be the first to get in its retaliation and public relations so that it can attribute the blame for the increased cost of local government to the other side.
The system is so complicated that the only person in the world who understands it, outside the Scottish Office, is Mr. Albert Tait, who does wonderful work for COSLA. The Minister was right to pay tribute to him and colleagues, who supply us with the information that we require to inform these debates. We must get a system that is more transparent and with which people can cope. We need a system that people can comprehend and about which they can make sensible judgments. That is not possible with the current system.
It is not sensible to have a system, which we all now accept as a matter of course, that requires central Government to fund 88 per cent. of local authority spending. It is time that we stood back and looked at exactly what that means for the autonomy of local government and how local councillors can best discharge their duties. An important factor in the debate, which has been mentioned earlier, is that 66 per cent. of all local authority spending goes on staff-related costs. For the Government simply to say, as a matter of course, that they are giving increases that take account of inflation does not begin to meet the true increases that local authorities will face. We all know that, year on year, earnings invariably rise faster than prices. In Committee, we are now contemplating our system of reform for local authority organisation in Scotland, yet we are not looking in any detail at the system of finance. That is stupid. It is not possible to reform the system of local government north of the border without looking carefully at a more sensitive, coherent and transparent system of finance.
The relationship between central Government and local government is appallingly bad. We should try to repair that relationship to achieve a greater feeling of partnership and a far lesser sense that there is a constant war of attrition between St. Andrew's house and the local authorities


collectively north of the border. I am very concerned that the results appear to be that no one is listening to the other side of the argument and that power is being gradually and inexorably drained away from the local authorities, which is a bad thing in principle.

Sir Nicholas Fairbairn: Does the hon. Gentleman agree that it would be wise to inquire into the number of people who are employed by local authorities? General extravagance and over-employment are the real cause of the burden on the citizen.

Mr. Kirkwood: The hon. and learned Gentleman, as usual, anticipates my next point. I agree with him to an extent, but there is a factual increase which is difficult to justify unless one considers the additional duties, responsibilities and liabilities that the House is placing on local government. I need to use only one example to demonstrate my point. The community charge legislation, which was succeeded by the council tax legislation, required even local authorities in south-east Scotland and other non-profligate authorities to hire extra hands and computers to deal with the work that we as a legislature perforce required them to undertake. The hon. and learned Gentleman is right. We as legislators should be much more careful before we willy-nilly overlay new layers of duties on local authorities, as we often do. His point is valid to that extent.
My next point in general terms is that I am suspicious of the client group approach, as it is currently implemented and introduced into the method of calculation of the relative amount that each authority receives. It is flawed. In my experience, it is certainly flawed in the way in which it calculates the share-out of local authority revenue in rural areas.
Primary indicators basically count heads. For example, if money is to be paid to local authorities for primary education, one considers the first primary indicator, which is the number of children in schools. That is a common-sense approach. However, secondary indicators do not take nearly enough account of the factors that apply in rural areas which have disparate populations and a series of problems. Their problems might not be as great as those of urban areas but, in their own way, they are just as important to local areas in rural landward parts of Scotland. I do not believe that the client group approach, as currently drafted and implemented, takes those problems properly into account. I hope that the Minister will give the House some comfort by saying that he is prepared to consider developing and refining the way in which the client group method is calculated in practice.
I had a slight difference of opinion with the hon. Member for Kincardine and Deeside about the ability of councils to accommodate wage costs and then redistribute savings. Of course I am in favour, as everybody is, of local councillors achieving efficiency, but that is a bridge too far. It is totally impossible for local authorities to make savings of the kind to which he referred; indeed, the reverse will occur.
There is evidence that there will be job losses if central Government limits and capping rates are implemented in the way we expect. There are some problems. It is stupidity itself that we have a local government settlement that takes

no account of the realistic increases that are bound to be in the pipeline in the way of public sector wage settlements which, again, are negotiated nationally, not locally.
I have concluded that there will inevitably be job losses or reductions in services. In my own regional authority, which is not a profligate authority, we have to find savings of about £400,000 in social work and about £200,000 in education. That means that all sorts of sensible, planned, service delivery projects will have to go by the board. Throughout Scotland, there is great need for nursery education—there certainly is in the borders. There is a great need in the border towns that I represent to develop, extensively, better facilities for young people. The social work and community education authorities have worked out plans and are doing their best to develop those services, but they are being hampered by a shortage of finance.
The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) mentioned the maintenance of school buildings. I agree. One price that we will have to pay for the orders is that maintenance schedules will be delayed and delayed again. As he mentioned, that is a short-sighted, short-term policy. Another consequence of the orders will be further delays in making improvements in the safety of school transportation which, as hon. Members know, is a matter of great concern to community councils and school boards in rural areas after the recent terrible accident in Biggar.
As for social work, in the near future we will be able to determine the consequences of the orders. Already, in my authority, the charges for home helps and meals on wheels and other charges have been increased. People are already in severe financial circumstances, which will be exacerbated by the imposition of VAT on fuel on 1 April. They are being hit twice. It is a double whammy in terms of the effects of some social work cuts, not to mention the closure of the old part IV accommodation and residential homes, many of which are institutions in their localities. That accommodation will have to go by the board.
Another example—it is not an exhaustive list—is that the ability to develop future industrial sites and engage in an industrial strategy at regional authority level will be severely hindered and hampered by the orders. Another point that is directly relevant to the non-domestic rate aspects of the orders is the effect on local authority finance in relation to the uniform business rate. The hon. Member for Kincardine and Deeside mentioned that point. I am also concerned about some of the issues about which he talked.
What worries me more than anything else is that, using the evidence of my own eyes and ears, high streets in market towns throughout Scotland are being decimated by a combination of factors, not just the non-domestic rate imposed on them. Our high streets are under tremendous pressure. The amount of rates that businesses now pay in place such as Kelso and Jedburgh is worrying. The effect is available for all to see. Many of our high streets are suffering and paying the price. The orders take out an extra £12·5 million, according to the COSLA figures, from what local authorities would otherwise have expected had the old non-domestic rating system applied. That money would have helped them to address the problem.
I wonder, too, whether the allowance for loan and leasing charges of £750 million or thereabouts for 1994 is enough. With a bit more leeway, local authorities would be able to develop capital projects. I can list several capital projects in my constituency—for example, the new school that is needed in Jedburgh, the new bridge that is urgently


needed as a matter of safety in Kelso, the redevelopment scheme at Gallalaw in Hawick and the Eyemouth harbour development project. They are examples—again, it is not an exhaustive list—of projects that could be brought on stream by local authorities in a way that would put local people back into work and assist the national finances very positively.
Finally, I shall refer to something that was mentioned by the hon. Member for Hamilton (Mr. Robertson). The allowance for transitional costs to the new local government system is severely understated, at £5 million for this year, £25 million for next year and £50 million for the year after that. I ask the Secretary of State—he is the Treasury Bench note-taker while everyone else is out having his tea, and we are not complaining about that—whether, if we bring evidence in the coming weeks and months that shows that the figures are inadequate for 1994–95 and subsequent years, he will give an assurance that he is willing to look at that evidence and bring back more realistic estimates. The whole of the local government establishment north of the border is severely exercised and worried about that question.
A whole series of worries relate to the orders. I do not think that it is anything like good enough for the Government simply to say that there is price protection and a bit more, so why is anyone worrying? That is a superficial and disingenuous approach. When the detail of the orders is studied with care by people north of the border, and if they get to the stage where they can understand the full consequences of the orders, they will be very unhappy that the settlement reached for next year is unfair to local authorities north of the border.

Mr. Phil Gallie: I did not come here armed to speak today. Having heard the rate support grant settlement, I honestly thought that all hon. Members would be amazed that the Secretary of State has been able once again to increase the levels of rate support grant beyond the level of inflation. That is a remarkable achievement which goes back year by year throughout the 1980s. Bearing in mind the comments by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on education, I must repeat that if we go back to 1978 and 1979, there were no rose-coloured spectacles; the fact is that at that time the rate support grant was cut in real terms. It beats me why hon. Members hark back to those times. The reason why they criticise the settlement announced by the Secretary of State is beyond my comprehension.
More than £6 billion has been allocated through Government supported expenditure this year. That is a remarkable sop. If we analyse it further, we find that that accounts for some £20 per week for everyone in Scotland in 1994–95. Scotland receives greater central Government support for local spending than the rest of the United Kingdom. That means that we have higher expenditure of about 34 per cent. per head in Scotland than in England. That tells a story.
The hon. Member for Hamilton (Mr. Robertson) suggested that the people of Scotland will have to pay more because of the generous rate support grant settlement. Of course, they will have to pay more. If the Government spend more, taxpayers must take more out of their pockets, whether through council tax or general taxation.

Mr. Salmond: rose—

Mr. Gallie: If the hon. Gentleman lets me finish my point, I shall give way. The charge today from Opposition Members is that the Government are not putting enough into the kitty through revenue support. If the Government put more in through revenue support, their only option will be to raise taxes, although Opposition Members continually condemn them for taxing at the current levels. What I have not heard in this debate is how on earth Opposition Members would bring in more money through the general taxation system and where they would put that money with regard to local authority expenditure.

Mr. Salmond: In the hon. Gentleman's comparison of Scottish and English local government figures, has he allowed for a different range of responsibilities? Obviously, in the current circumstances English local authorities do not control water and therefore do not spend anything on it, although there were substantial green dowries when English water was privatised. Allowing for that difference in responsibilities north and south of the border, can the hon. Gentleman tell the House the real figure?

Mr. Gallie: The hon. Gentleman refers to water. The rate support grant for water in the Strathclyde region is absolutely infinitesimal. Basically, the charge for water and sewerage services is set by the councils and I see no reason to change the figure of 34 per cent. along the lines suggested by the hon. Gentleman. Perhaps my hon. Friend the Minister will be able to clarify that point further as the debate continues.
As to the charge that the rate support grant is not sufficient for local authorities to sustain services and thrive in the years ahead, I must come back once again to the stated intent of Glasgow district council to cut back on the council tax. At the same time, I do not hear a charge that Glasgow will cut services. Glasgow seems to be able to live with the settlement and has adapted it to meet the needs of the people in its city without passing on the massive increase that we heard so much about from the hon. Member for Hamilton. Indeed, there have been numerous examples of other local authorities announcing standstill and reduced council tax settlements, despite what Opposition Members said.
I have every reason to feel a certain degree of pride with regard to Kyle and Carrick district council. When that council changed administration almost two years ago, it inherited a massive deficit of £2 million on the revenue account, which it has turned round. That is a sign of good Conservative management in local authorities. That must not be condemned but applauded.
When I examine the spending programmes for this year, and had I been a councillor on Kyle and Carrick district council—we have been told that it is a radical right-wing council, yet it seems to be going on a spend, spend, spend programme, as the local paper suggested; and perhaps I am a bit more right than some members of the council—I would certainly have looked at a reduction in council tax charges for next year. That would have been meritorious.
The rate support grant means that expenditure will be directed at improving the infrastructure and aspects of Kyle and Carrick. It means that new jobs will be created as a result of the way in which cash is spent, and Kyle and Carrick will prove that its cash investment will be advantageous to council taxpayers in the future.
Stirling district council was condemned for laying off 18 people and much has been said about job losses. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) suggested that there are problems for local authorities in this area. He referred to the imposition of the community charge and the fact that that had created many more jobs in local authorities. If that is the case, and given that the hon. Gentleman has got his way and we have returned, somewhat reluctantly as far as I am concerned, to a property-based tax for funding local authorities, perhaps local authorities should now be examining the manpower that they are using in this area. If there had been a massive increase in the requirement for labour at the time that the community charge was introduced, and if Opposition Members are correct now, perhaps there is an opportunity to cut the number of people employed in this area.

Mr. Kirkwood: Will the hon. Gentleman allow me to buy him a cup of tea afterwards and explain to him how a local income tax would mean significant staff reductions? I would like to see that, and we have been arguing for it for many years.

Mr. Gallie: I recognise that the hon. Gentleman is an ardent supporter of a local income tax, but I think that he will recognise the impossibility of introducing such a tax against the background of the numerous local authorities in Scotland. His argument might gain a little value following the changes that we are studying.
Having said that, I have no wish to see a local income tax introduced in Scotland. It would not be rational, and it would be highly bureaucratic. Those involved in the tax would be looking deeply into the affairs of individuals, and I would not support that intrusion.

Mr. Bill Walker: My hon. Friend might care to inform the Liberal Democrats that some of us have examined the working practicalities of a local income tax in great detail. My information—based on research which I have done during a number of years—suggests that such a tax would be even more costly to operate than the community charge, and would cause far more resentment.

Mr. Gallie: rose—

Mr. Deputy Speaker: Order. Before the hon. Gentleman goes down that way, I remind him that we are talking not about the council tax or any other tax but about revenue support grant, and the hon. Gentleman should stick to that.

Mr. Gallie: I was talking about revenue support grant and the adverse effect on jobs that that would have, as has been suggested by Opposition Members. Advantage could be taken of recent changes which would allow additional cash through revenue support to be used in a different manner.

Dr. John Reid: Given that revenue support grant is dependent in its proportion on the manner in which other local finances are raised, and given that the hon. Gentleman has ruled out a local income tax and has, in addition, ruled out a property tax, will he put on record for the people of Ayr that he still supports a poll tax?

Mr. Gallie: rose—

Mr. Deputy Speaker: Order. I do not want the hon. Genteman to go down that way and talk about the poll tax, the council tax or any other tax. We are talking about revenue support grant.

Mr. Gallie: I respect that view, Mr. Deputy Speaker, and it is with great reluctance that I do not respond. I would certainly have liked to respond in a positive manner to the hon. Gentleman's comments. Given your guidance, I will attempt to stick to revenue support grant.
With your indulgence, Mr. Deputy Speaker, I shall concentrate a little further on jobs. A local authority must look at the number of people it employs when considering revenue support grant as an element of its financing. With about 60 per cent. of local authority expenditure going on the wage bill, that is very relevant. It is the responsibility of every local authority to look at its staffing structures and to attempt to get the right structure to meet its needs.
After all, running a local authority is not much different from running any business, if one considers the turnovers for each local authority. In Kyle and Carrick, for example, about £14 million comes in revenue support grant from the Government.
We have heard no whining from Kyle and Carrick. The council is holding its council tax, and it is still managing to spend £2 million on capital projects. That is despite the fact that Kyle and Carrick's revenue support grant has been reduced during the current year. We have heard no one whine—the council has got on with the job, and a dashed good job it is doing.
It is not just local authorities who have been forced into cutting jobs. The Daily Record has cut 200 jobs, and the House has not heard the Opposition complaining about the cut in the newspaper's staffing. Yet Opposition Members think that the loss of 18 jobs in local government is a major disaster. That is a logic which escapes many of us, and certainly escapes the workers at the Daily Record.
I have heard comments about cuts in the education budget as far as it affects school buildings. It is my view that Strathclyde regional council has failed to address the real problems of sound maintenance and management of its school building programmes. I did protest about the closure of Castlehill, a school which had a 70 per cent. occupancy rate and a set place in its community. I protested against the background of Strathclyde having promised a replacement school for Castlehill up till the eleventh hour, when there was a sudden change and the council went for hon. Gentleman was elected."] The closure was wrong. It was bad management, and that was what I criticised. That record in the management programme for the provision, new build and maintenance of school buildings has continued for 10 or 15 years.

Mr. Thomas Graham: I thought that it was on record that the previous Secretary of State for Scotland had mentioned how prudent and good an authority Strathclyde regional council was. Many of the council's management plans saved a lot of money. I was interested to hear the hon. Gentleman's statement on management or mismanagement. Will the hon. Gentleman put that on record so we can see clearly where he believes the deficiencies were in Strathclyde?

Mr. Gallie: I must say that the hon. Gentleman's reading is not mine. If he cares to present to me the statements made by the various Secretaries of State who


have commended Strathclyde regional council on its schools maintenance programmes, I shall take them on board.

Mr. Stewart: Did my hon. Friend hear the sedentary comment from Opposition Members to the effect that Strathclyde proposed the closure of Castlehill because he had been elected to the constituency?

Mr. Gallie: I must think carefully before I respond to my hon. Friend. I must say that it is not the first time that I have heard that remark. Certain remarks were made along similar lines with respect to a sewage works at Greenan. I would like to discount those comments, because I do not believe that any authority with any credibility could consider making judgments in such a way. On that basis, I shall dismiss the comments that my hon. Friend heard from the Opposition.
The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) referred to the much-needed link between the A77 and the M8, and to the link between the M77 and the A77. The hon. Member for Kilmarnock and Loudon (Mr. McKelvey) and myself have both been chasing my hon. Friend the Member for Edinburgh, South on that matter over recent months.
Strathclyde regional council has had capital consents given over the years which should have allowed it to make progress on that length of road, but year by year that cash has been diverted elsewhere. I am well aware of the delicate state of the negotiations between my hon. Friend the Member for Edinburgh, South and Malcolm Waugh, the convener of the transport committee of Strathclyde regional council. I do not wish to aggravate the position and I shall not comment further. I should like to think that agreement can be reached in the not-too-distant future and that plans for the road link will come to fruition.
The hon. Member for Carrick, Cumnock and Doon Valley made some remarks about sewerage facilities in Ayrshire. Here again, there are instances—

Mr. Nigel Griffiths: I am not sure whether I misheard the hon. Gentleman or whether he referred to my constituency when he meant to refer to that of someone else.

Mr. Gallie: I have referred to the hon. Member for Edinburgh, South (Mr. Griffiths) when I should have referred to my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton). Apart from the pleasantries exchanged outside the Chamber, the fact that I used the words "hon. Friend" speaks for itself.
In drawing my remarks to a close, it would be churlish of me not to refer to the generous increase of more than 8 per cent. in housing capital allocations given to my local authority recently. I recognise that that is not revenue support, but it is worth noting and I thank my right hon. and hon. Friends on the Front Bench for it. It is also worth while extending my comments to the housing non-revenue account payments which will also meet with satisfaction in my area. I recognise that I am beginning to stray a little, Mr. Deputy Speaker, so before I incur your wrath, I shall take my seat.

Mr. Robert Hughes: The hon. Member for Kincardine and Deeside (Mr. Kynoch) made a commendably brief speech. It was fascinating because it

revealed how his mind operated. He sought to give us a lesson in elementary economics of such naivety that I suddenly realised how lucky we were to see the hon. Gentleman in the House at all. If he had applied such simplicity in his business affairs, he would have gone bankrupt long ago and would have been unable to take his seat in the House. I have never heard such misrepresentation of the facts on expenditure, revenue or proportions grossed up or grossed down. I do not think that he understood what the order was all about.
The difficulty that we have in discussing the orders is that we have little to go on when we try to work out how the different figures in the orders have been arrived at. The Minister would have us believe—I apologise for missing the early part of his remarks—that expenditure figures are calculated according to some sophisticated mathematical formula. He would have us believe that everything is worked out to give authorities their proper due. [Interruption.] If my hon. Friends will allow me to speak, I will not barrack them in the middle of their speeches.
The approach of the Minister and of many Conservative Back Benchers is simple. They take the general view that local authority expenditure is bad and Labour local authority expenditure is worse and not to be tolerated. I will give the Minister at least some credit. I think that he was trying to be accurate. All that I can do is be charitable to him by saying that he does not understand the formula.
The Minister's view is that any wage increases must be paid for by efficiency savings. That view is commonly reflected on the Conservative Benches. Many Opposition Members know that that is unrealistic. In many cases, the phrase "efficiency savings" is a euphemism for driving down wages and sacking people. That is what it amounts to.
Everyone knows perfectly well that it is unrealistic to expect efficiency savings to meet all the increases which are in the pipeline. Let us take the example of wage increases. We know for a fact that teachers in England and Wales have already received a 2·8 per cent. pay increase. We do not know what the figure will be in Scotland. I should be surprised if it was less than 2·8 per cent. We know that other wage claims are in the pipeline. The Minister cannot expect ordinary people to put up with large increases in tax from April this year and the imposition of VAT on electricity and gas without seeking recovery for that in their wages.
It is bad enough that the Minister says that there should be no pay increase. He is asking for a severe reduction in people's living standards. People are right to seek at least to maintain their current living standards. Our ethos should be to increase people's living standards. There is no way in which the pay increases that are in the pipeline can be met by the settlement. Indeed, there is no way in which those pay increases can be matched by loss of jobs or anything similar.

Mr. Salmond: I noticed the Minister shaking his head when the hon. Gentleman was making the point about efficiency savings in the public services. The hon. Gentleman is familiar with my constituency and with the Willowbank adult training centre for the mentally disadvantaged. Does he think that efficiency savings in that centre can be used to pay reasonable salary increases to the extremely committed staff who man that centre?

Mr. Hughes: I certainly do not believe that efficiency savings, particularly in places dealing with the mentally handicapped, should be the way in which staff wages are increased. Many of the staff who put in for pay increases are dedicated people who offer a service more often than not above and beyond the call of duty. They do not simply see their way through the day from 9 am until 5 pm, or whatever time, and then go home. People take their work home with them. They have a commitment to the people whom they serve. That is not confined to those who deal with the mentally handicapped.

Mr. Bill Walker: I wish to understand clearly what the hon. Gentleman is saying. As I understand his argument, his view is that it is unrealistic to expect the wage increases that are in the pipeline to be met by efficiency savings. He is not saying that there is no such thing as efficiency savings?

Mr. Hughes: Of course I am not saying that there is no such thing as efficiency savings. However, for at least the past five years, if not longer, we have been told that tale every year. We are told that there must be efficiency savings and efficiency gains. The facts and figures show that local authorities throughout the country have made large efficiency savings and gains. They have squeezed and cut the services down to the bone. When I give some examples of how that has been done, people will understand that we have gone so far that we cannot go any further.
The Minister praised some authorities for holding their council tax down. I wonder how many of them are spending their reserves. Perhaps he can answer that. In my view, to spend the reserves simply on keeping the council tax down is bad. If there are reserves, they ought to be spent on the people directly by providing services.
We have this sterile argument year after year. The Minister and Conservative Members say that so long as an authority holds its rates, poll tax or now council tax steady, with no monetary increase, it is a good authority. I say that that is not necessarily the best test. It is not a bad test, but it is not necessarily the best of tests. We need to look at council tax and service provision together.
Let us consider what is in store for local authorities. I am told that a 3 per cent. pay award across the board cost Aberdeen city district council £5 million on its band D tax. That will take a lot of recovering in council tax.
The trouble is that Ministers do not take into account the many demands being made of local government. The population is increasing in the north-east of Scotland, which implies increasing demand in the city of Aberdeen and the region. We are entitled to an explanation from the Minister of how he arrives at his figures for the area.

Mr. Stewart: The hon. Member will appreciate that not all the council tax figures for the north-east of Scotland are in. However, he will also appreciate that the recommendation to the Grampian region is for a zero increase in council tax, that Banff and Buchan has decided on a 4·8 per cent. increase and Gordon on a 4·7 per cent. increase. Those figures are not compatible with the argument that the settlement is somehow unfair to the north-east of Scotland.

Mr. Hughes: That goes to show that one should never give way to a Minister in the middle of one's speech because one will not get the answer one expected. I did not

ask the Minister about the figures. I asked how many authorities in Scotland are using their reserves to keep the council tax down.
I shall now deal with what I regard as the unfairness to the north-east of Scotland. The aggregate external finance has been cut by 3·3 per cent. for the city of Aberdeen, but it has increased in Grampian by 2 per cent., in Banff and Buchan by 1·8 per cent., in Gordon by 1·2 per cent. and—the oddest of all and I cannot understand any reason for it—in Kincardine and Deeside by 5·1 per cent. What are the factors that govern such huge differences in aggregate external finance in a fairly compact and cohesive area?
Why should the aggregate external finance for Aberdeen, which faces the tremendous social problems normally associated with cities, decrease by 3·3 per cent. while Kincardine and Deeside which borders it—the constituency overlaps the local government boundary for the city—gets a 5·1 per cent. increase? I know that there are problems in rural areas, but why should there be such a difference?
I know that the Minister's stock answer will be that the distribution figures are worked out by the distribution committee of the Convention of Scottish Local Authorities. The decision on the figures is not taken by COSLA, but by the Minister. He cannot duck his responsibilities by saying that such matters are discussed or decided elsewhere.
The explanations for expenditure decisions and how they are arrived at are inadequate. What about community care? We have been told that much money has been transferred to local government so that it can deal with community care. Yet we are also constantly told, and given example after example, that the amount of money transferred is inadequate to deal with the social problems involved.
We have all been made aware in our constituencies of examples of the lack of follow-up care and attention—examples of people being put into local authority houses and left on their own without supervision. Who is responsible for supervision? Is it the hospital or the regional authority? Is it the health trust or the social work department? No one seems to know.
As far as one can discern, the distributions seem to mix up community care expenditure and expenditure on aids and adaptations to houses, which is unfair. The Minister must look more closely at the way in which, under the tenants' rights legislation, so-called amenity houses can be sold while sheltered housing cannot. That is resulting in severe problems with the provision of aids in amenity houses. Authorities are beginning to wonder whether they should spend money on anything except temporary adaptations, which can be taken out. That is bad economics. It is much better to make proper, permanent provision for the people who need such aids so that the houses can be transferred to other needy people later.
We mentioned education and I hope that the Minister will listen closely because expenditure on education has been cut so much that Grampian region, which the Minister keeps telling me is a very good authority—I am sure that that remark in Hansard will be used in election manifestos in May—

Mr. Stewart: rose—

Mr. Hughes: I shall not allow the Minister to renege. I had a ringing endorsement for Grampian regional council from him and it will have to stay in the record. He is not going to wriggle out of it now.

Mr. Gallie: Will the hon. Gentleman give way?

Mr. Hughes: No. I shall not allow an ambitious and hopeful surrogate Minister to intervene.
I take it that the Minister agrees that Grampian region has done extremely well on education, but we have problems. Beechwood school in my constituency caters for children with special needs. The school swimming pool has been closed for more than a year because the region does not have enough money to repair the heating system or install a new one. One might ask, "What's a swimming pool? It's just for recreation. The children can go elsewhere." The kids are going elsewhere, but they have to be out of school for two and a half hours to get a half-hour swimming lesson. For children with special needs, swimming is not simply recreation; it has therapeutic value. It is disgraceful that such money should be held back and that there is not enough in the budget. That is one example of how education is being squeezed and the children who are most in need are the ones to suffer.
People are beginning to understand that one will always have to pay the price for neglecting social provision and social problems and for ignoring the rise in drug addiction and other similar problems. There is a price to be paid. Parents in many parts of Aberdeen are becoming desperately concerned because syringes that have been used to inject drugs intravenously are being left lying around. That is dangerous for health. That is the cost which must be paid. If one neglects good housing conditions and good education, the community will pay the price.
It is far better for the community to face up to the costs of providing good education, social services, housing and employment prospects. That is a much better and more positive price to pay. People are beginning to grasp that argument and the fact that holding the council tax down—as the only real test of a council's efficiency or value—is bad news and a bad way to approach the problem The more that they wake up to the fact that good social and local authority provision are good for the community, the better. We are winning that argument and we will win votes as well.

Mr. Jimmy Wray: The hon. Members for Tayside, North (Mr. Walker) and for Kincardine and Deeside (Mr. Kynoch) said that my area has high expenditure, but it is not much higher than other areas of Scotland. The hon. Member for Tayside, North mentioned addressing the issues, and I shall certainly do so tonight—[Interruption.] Conservative Members should be called to order.
I have served on local authorities for a number of years, and I know exactly where all the problems began. Just in case the Minister has never visited a constituency such as mine, let me tell him about the poverty and the misery that has been created over the years by the Government. We have heard all the rubbish about the revenue support grant, but everyone knows that it is a pittance, which will never deal with the problems.
In my area, some houses have been boarded up for two years. People are crammed into houses, and others are

homeless. They never will get a house from the Government. My authority is still paying the interest charges on houses that were built 60 years ago. We know all about local authorities and we know how, over the years, the Government have pressed them hard and brought them to their knees. How did they do it? The answer is the Miscellaneous Financial Provisions Act 1983 and the Local Government and Planning (Scotland) Act 1982, which gave the Secretary of State more powers. Is it not a scandal, wrong and shocking that the Secretary of State should have those powers?
I wish that we had a video of all the problems that have been created since the Government came to power. All the problems I have mentioned are related to the rate support grant and to the revenue support grant, which is supposed to clear up the problems of the country.
What have we got? Unemployment is high all over the place. The poor health of my constituents is unsurpassed throughout Britain. Glasgow has the worst infant mortality rate in Britain, and the mortality rate for adults between 45 and 65 years is the highest in the country. Those are the problems created by the Tory Government. The people of Britain and of Scotland must do one thing. They must recognise that the Government are not on their side. If they were, they would not just be giving people a small pittance in the revenue support grant.
How are people supposed to deal with the problem of 12,000 drug addicts in Glasgow, with an evil trade worth £188 million? The police cannot even catch the dealers for a breach of the peace. They cannot deal with the problem, but the morgue is full of youngsters. What are the Government doing about that when they talk about statistics? This is not a game for the faint-hearted or one of comedy. It is a game of seriousness, because people are out there dying on the streets. We want to make sure that something is done. That is why we must increase the revenue support grant when we take power.
The hon. Member for Kincardine and Deeside mentioned the unemployment figures, and how we should deal with them if we cannot deal with the problem through the rate support grant. The only way to deal with the problem is to regenerate the economy. We should not pay £9,000 for people to sit in their houses and lie on the labour exchange. The Government should invest that money to give those people a job and hope. Show them a light at the end of the tunnel. If the Government cannot do that, they should not be in power, and they should never return to power.
Many local authorities in Scotland, especially those in Glasgow, would like to do more to improve housing. Over the years, Glasgow has suffered from Tory landlords who have left and sold their properties off at a pound a time. They put a burden on local authorities, when priority should have been given to people who are living in slums. Their fathers and mothers could not get a job and they were on the labour exchange from the day their children were born to the day they died. This is the kind of world that the Tories want people to live in.
Bad education is hereditary. Why did the Government not take up the recommendations of the Plowden report, which said that areas of deprivation should be made a priority and given nursery education? It also said that the pupil-teacher ratio should be reduced. [Interruption.] It is all right for the hon. Member for Billericay (Mrs. Gorman) to laugh. While you are laughing, people are suffering out


there. I hope that the cameras are on you, because you are a certain calibre of Conservative. Why are you laughing when people out there are suffering?

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. May I cool things down a little bit by saying that I am responsible for none of this? The hon. Gentleman keeps on referring to "you", but that means the occupant of the Chair. If the hon. Gentleman refers to an hon. Member or hon. Lady, he will be in order.

Mr. Wray: Thank you very much, Mr. Deputy Speaker, for your correction. Unfortunately, we are worried about Conservative Members who come in here—perhaps they have been sitting in the Tea Room, when we have been sitting in the Chamber all day because we are really interested in trying to improve services throughout Scotland.

Mr. Graham: My hon. Friend and I are close friends. He will be aware that I have been inundated with requests from mothers for nursery provision in all areas, including Erskine, Kilbarchan, Lochwinnoch and Gourock. Those mothers are desperate for their kids to get some pre-five education. My hon. Friend is quite right that Strathclyde cannot provide it, because it does not get enough money from the Government to satisfy the needs of our people.

Mr. Wray: My hon. Friend is quite correct. Strathclyde region had policies that were designed to last not for one or two years, but for between five and 10. It had decided to implement policy, but when it had an opportunity to implement the recommendations in the Plowden report, it had to close schools down. Plowden recommended that people living in deprived areas should have a pupil-teacher ratio of 1:10 not 1:20, 1:30 or 1:50, as in the past. That is the kind of education we need for people from humble backgrounds. [Interruption.] I hope that Conservative Members will listen carefully.

Mr Bill Walker: I genuinely respect the hon. Gentleman's passion and concern. I trust, however, that he acknowledges that not all Conservative Members have no experience of poverty, and that we care just as deeply as he does.

Mr. Wray: That applies to very few Tory Members. I have never heard a Tory Member make a passionate speech about his or her constituents living in poverty and bad housing. If you lived in my area—

Mr. Deputy Speaker: Order. I hesitate to intervene on the hon. Gentleman again, but he has not yet got out of the habit of saying "you". I hope that he will try to do so.

Mr. Wray: From now on, I shall address my remarks to you, Mr. Deputy Speaker.
You, Mr. Deputy Speaker, will agree that Labour Members are extremely concerned about the changes that have been made, especially with regard to housing. Under health legislation of 1970, if a house is below tolerable standards and is damaging household effects, a tenant in Scotland has a right, because the local authority is not dealing with the service as it should and is creating a hazard to the tenant, to summon the local authority to court.
Under housing legislation of 1966, local authorities have the discretion to spend money to put those properties right. Glasgow district council has had to spend millions of pounds in compensation, because the Government would not give it enough money to deal with the problems in the area.
Strathclyde regional council was restricted by rate capping, so it could not deal with its transport problems. The Government then introduced deregulation, when good services disappeared and we were left with ghost streets. A greyhound service and a leapfrog service now compete with each other. Many important services have been lost, so we know exactly what the situation is.
The Government wasted millions of pounds when they introduced the Water (Fluoridation) Act 1985, allowing local authorities to buy equipment and waste money. Those millions of pounds could have been spent on solving the problems. If the Government had come to me, I would have told them about the food and drugs legislation, the Water (Scotland) Act 1946 and section 130 of the Medicines Act 1968, which would have saved local and central Government millions of pounds. We took them to court because they did not know the Act, which is why they had to introduce the 1985 Act. All that was a waste of money.
Why do hon. Members think that all the mad schemes which the Government have introduced, such as the poll tax, the council tax and those mad local government schemes, were not respected by COSLA? We had seen what local government reorganisation meant. Men and women who had worked for years in local authorities were dumped on the dole because the Government had bought out their jobs.
Two decades later, the Government are doing the same again. They are looking for money through the introduction of those schemes. Schemes such as child support have nothing to do with helping children: they are simply about helping to clear up the deficit. Of the £530 million coming in, only £50 million will go to the children. That is why local councils cannot provide the rate and revenue support that is needed.
I realise that many hon. Members are waiting to speak, so I shall not take a great deal more time. I could stand here all night, because I have a great deal of experience in the corporation. I live a lot among the people. They act as a sounding board for me every Saturday. Why do not the whole Government take a walk with me around Paddy's market on a Saturday and see exactly what the problems of the people are? A walk around the Oxfam shops will show them just how well people are doing.
I just hope that, next time we deal with rate support revenue or any other assistance which the Government hope to give working-class people, they will give them a wee bit more.

Mr. Malcolm Chisholm: The consequences of this important debate will have an impact on thousands of council workers and millions of service users. Once again, this debate has shown that there are lies, damn lies and Scottish Office statistics. The Government have particular reasons for distorting the figures this year, because this is the worst settlement for local government since 1979, and Opposition Members can all remember quite a few bad ones.
Tonight we need to compare the figures for 1994–95 with the figures for 1993–94—not that this year's figures were very brilliant. But before we do so, we should bear in mind two points which may have become muddled by certain Conservative Members in this debate. First, what inflation rate are we talking about? We are not talking about the rate that includes mortgage interest relief—at 1·8 per cent. We are talking about the other inflation rate, which, according to the Red Book, will be 3·25 per cent. in the coming year.
Secondly and crucially, we must remember that the money for next year includes community care money that was not included in the settlement for this year. That community care money will amount to about 2 per cent.—a fact consistently forgotten by Conservative Members, enabling them to inflate the actual figures for next year's spending.
I want to look at the figures for Lothian region; it helps to look at one authority instead of bandying about general figures. The aggregate external finance for Lothian region for this year was £572 million. Aggregate external finance for next year will be £583 million. No doubt the Government will tell us that that represents an increase of £11 million. I must tell the Government, however, that transferred money for new expenditure on community care will amount to £11·5 million; so the cash settlements for Lothian region this and next year will be the same.
I could also point out other items of new statutory expenditure, such as money for devolved school management and local government reorganisation. Taken together, these would mean that the cash for next year, in straight terms, is less than for this year. For the sake of this debate, however, let us assume that the figures for the two years are the same. Since 1979, as far as I can remember, Lothian region has never suffered no cash increase from one year to another.
The settlement therefore represents a real cut, given the inflation rate of 3·25 per cent. This 3·25 per cent. cut is part of a general public expenditure cut across local authorities in Scotland and across all the services in the United Kingdom. This has led Andrew Dilnot of the Institute for Fiscal Studies to say that this public expenditure round makes Lady Thatcher and Lord Howe look like socialists, so draconian is it and so much worse than anything they imposed.
It is because of this sort of figure that the Government aim to reduce the share of GDP taken by public expenditure from 45 to 42·5 per cent. in only three years. These draconian figures are getting worse; my hon. Friend the Member for Peckham (Ms Harman) has seen the Grey Book—the updated public expenditure figures—which reveals an additional £750 million cuts in public sector asset creation. No doubt there will be other changes too, but that is the one that she has drawn to our attention.
This is a terrible settlement for local government, and it is part of a terrible public expenditure settlement. Lothian will receive the same cash this year as in the previous year, once the community care money is stripped out of the figures.
The Governnment claim that there can still be a cash increase of 1·75 per cent. It does not take too much imagination to realise that the only way to achieve that is to hike up the council tax. Even a cash increase of 1·75 per cent. will still mean a cut, but to achieve that cut Lothian

region will have to increase its council tax by 10 per cent. So the region faces next year a cut in services and a 10 per cent. increase in council tax.
Quite apart from the general budgetary problems faced by the Government, it probably suits their political purposes to do this, because this is regional elections year and a time of local government reorganisation. Doubtless the Government hope that the people of Lothian will feel that theirs is not a good council, because it is putting up the council tax by 10 per cent. and cutting services at the same time.
The Government hope that the people of the region will not regret the passing of that council—but the people of Lothian are not stupid. They are quite used to the cuts imposed on them by this Government, and they will realise, when their council tax rises and the cuts are imposed, that the blame lies at the door of the Government.
To get to that 1·75 per cent. capping point in the next recap, Lothian councillors must decide how to take £12 million out of what is already a strictly disciplined base budget. Those decisions will be made this week, and £12 million of cuts must be made in education, social work and other services. Although the decisions have not finally been made, we will probably find that, when people leave their jobs, their jobs cannot be filled, there will be fewer teachers and people in community education, grants to voluntary organisations will be cut, and school meal charges may even go up.
Lothian region will have to make those cuts because it is not getting enough money from central Government. It has had a massive real-terms cut, which means that the amount it receives this year will be the same as that for next year. The cuts would have to be twice as great if Lothian were to give the normal pay increase. In its budget this week, it will have to allow no money whatever for wage increases for its employees. We may have heard of pay freezes since the second world war under various Governments, but I cannot remember a pay freeze that did not give at least some protection to low-paid workers.
We all know that thousands of council workers are on low pay. Let us consider the effect that the settlement will have on their lives. If the freeze is maintained for the next three years, their pay will be cut by 10 per cent. Many of the tax increases that we know will happen in April will penalise low-paid workers in particular—such as the freezing of allowances, increases in national insurance contributions and VAT on fuel; not one low-paid worker will get a penny of compensation for VAT on fuel.

Mr. Graham: My hon. Friend will realise that there will be a swingeing increase in rents for the thousands of Scottish Homes tenants that the Government control. That will affect very much the low-paid workers in local government. Once again, we are seeing the boot being put in to people who are least able to defend themselves.

Mr. Chisholm: I thank my hon. Friend for adding that point. Housing is not strictly the subject of this order, but it relates to the public sector pay freeze, and allows me to say that there will be a rent increase in Edinburgh for another reason, because Edinburgh does not get a penny of housing support grant. I will not trespass on that subject, but that must also be borne in mind.
The public sector pay freeze is built into Lothian region's budget and all the Government's budgetary calculations. They are assuming that it will hold for the


next three years. Public sector workers have an impossible choice. If the freeze does not hold, there will be job losses. From this settlement and the general public expenditure settlement, we are likely to get job losses, a pay freeze and a devastating effect on services—all because of the economic incompetence and mismanagement of the Government.
It is not even as though, at the end of the day, it will achieve the Government's objectives. They would argue that we must take that medicine to solve the problem of the budget deficit, yet many experts are questioning whether the Government can achieve, by taking so much demand out the economy through pay cuts and public expenditure cuts, the growth that is necessary for them to achieve their targets.
Studies have been made in the past week by the National Institute of Economic and Social Research, the London Business School and the CBI, all of which say that the Government will not achieve their growth targets, and therefore will not solve their budget deficit problems. That leads to the obvious conclusion that the only way in which we shall have some restoration of public services, solve the deficit and achieve growth is by electing a Labour Government. That cannot come too soon.

Mr. Alex Salmond: If the hon. Member for Glasgow, Provan (Mr. Wray) took the present collection of Ministers round Paddy's market, he might have difficulty in finding a buyer. His speech, however, was very worth while. It brought us back to some of the basics—basic services affected by the orders.
There is a tendency for debates such as this to become ritualistic. The debates are also complicated by the fact that virtually no one understands the distribution formula that is being discussed. This is very much the Schleswig-Holstein question of Scottish politics. Only three hon. Members have ever understood it: one is dead, one is mad and the hon. Member for Glasgow, Garscadden (Mr. Dewar) is no longer in the Chamber.
That ritualistic quality does not convey a message worthy of the subject. In the normal course of events, the Government describe the settlement as generous, and the Opposition call it miserly and inadequate. We quote figures from the Convention of Scottish Local Authorities, such as £1·20 and 10 per cent. increases in council tax. The Minister implies, or even says in some cases, that COSLA has a vested interest in the figures and that its estimates are, therefore, not to be trusted.
When the overall settlement for Scottish local government was made, I took the precaution of asking the House of Commons Library to give its opinion of what the settlement would mean for the revenue position of Scottish local government. I did that at least to demonstrate that the hon. Member for Fife, Central (Mr. McLeish) was not the only person to use the services of the statisticians in the Library.
I think that the House of Commons Library provides a reasonably authoritative and independent estimate. It is not a hotbed of anything, apart from librarians. This is what the Library said about the settlements:
We estimate that after adjustment for changes in responsibilities this implies falls in real Government Support Expenditure (GSE) of 1·7 per cent. in 1994–95, 1·9 per cent. in

1995–96 and 0·7 per cent. in 1996–97. On an equivalent basis Aggregate Exchequer Finance … will fall in real terms by 2·9 per cent. in 1994–95, 2·7 per cent. in 1995–96 and 1 per cent. in 1996–97.
Even if the Minister is not prepared to accept figures from local government itself, is he prepared to accept argument and analysis from the House of Commons Library? Is he prepared to accept that that is the real position that faces local government in Scotland over the next few years of his stewardship? It is not good enough for him to point to individual councils that have succeeded in controlling their finances and to say that that proves that the overall settlement is adequate. That proves nothing except that some councils have managed their finances very well.
I was interested to hear hon. Members on both sides of the House compliment Grampian region on the running of its finances—although the hon. Member for Kincardine and Deeside (Mr. Kynoch) seemed to have forgotten the complexion of the council, and I am not entirely convinced that the hon. Member for Hamilton (Mr. Robertson) knew it in the first place. In any event, Councillor Pearl Paul, Scottish National party finance convener of Grampian region, will no doubt take the tributes made to her—by implication, at least—in good faith and in good heart. Grampian region indeed deserves to be complimented, not only on freezing the council tax but, for example, on the excellent 10p bus scheme that it introduced this year, which has been lauded by old-age pensioners throughout the region.
Let me offer a quick catchline to the hon. Member for Kincardine and Deeside, which he will doubtless hear rather more often during the coming weeks. What is the difference between the current administration of Grampian region and the Conservative party? The current administration helps pensioners and freezes the council tax; the Conservative party freezes the pensioners and helps itself to the tax.
Individual councillors and councils can do very well by prudent financial management and by looking after their own resources. That, however, does not alter the fact that, on the whole, the settlement and the orders are extremely bad news for the financial position of Scottish local government. We deserve an answer to the point about the overall settlement and the overall squeeze on local authority finance.

Mr. Bill Walker: The hon. Gentleman kindly read out some of the observations of the House of Commons Library. I doubt that any hon. Member would suggest that our Library gives us anything other than splendid service. Would the hon. Gentleman care to read out the qualifications listed along with the figures that he gave?

Mr. Salmond: I am happy to tell the hon. Gentleman that the only part that I did not read out was the following sentence:
As you will be aware, there was an announcement yesterday on local authority finance in Scotland.
Apart from that, I read out the whole of the Library's summary. I am happy to hand the full correspondence across the Chamber. I hope that, now that I have given the hon. Gentleman that information, he will join us in the Lobby tonight. Who knows? Wonders will never cease.
There is a real and important point in regard to what the settlements mean for Scottish local government. The


Minister should tell us a bit more about the overall settlement and not about individual success stories of councils in Grampian or elsewhere.
Scottish local councils and councillors are underpaid, under-appreciated and under the thumb of central Government. That position is deleterious to good local government administration. By and large, local councils and councillors in Scotland discharge their responsibilities very well. There are individual exceptions. Some councils are blots on the landscape of Scottish local government. When Ministers and the Labour Front-Bench team fling at each other the extreme examples of Kyle and Carrick and Monklands, it does not add to the debate and both parties are on a loser.
I have another question on finance. What evidence can the Minister produce to show that withdrawing powers from Scottish local government—powers that are covered by the revenue support grants—will lead to the better administration of public services in Scotland? What evidence can he produce that control by quango is more economically efficient than control by democratic local government? What evidence has emerged from the recent experiences of the Greater Glasgow health board and various local enterprise companies that control by quango, adding to the 5,000 quango members appointed by the Secretary of State for Scotland and the £5·5 billion—40 per cent.—of the Scottish Office budget already controlled by quango, will be in the best interests of the economic administration of services?
In the administration of finance, local government and local democracy have a better track record than quango government. Every local democratic council, even Monklands, has one essential saving grace. If Monklands district council does not discharge its responsibilities properly, its electorate can get rid of it at the next electoral opportunity. That check on efficiency is not available to anyone who wants to get rid of quango members who are clearly not allocating and carrying out their responsibilities properly. I can see that you, Mr. Deputy Speaker, are becoming somewhat restless about the comparisons that I am drawing, but they are relevant to the economics of the revenue support grant in Scottish local government. Local government provides both the best economic and democratic means of allocating finance for important services.
My next argument relates to the cost implications of the changes, including the £5 million that is mentioned in the orders. There is a good argument that single-tier local government will be more efficient. There is academic evidence based on the fact that smaller councils have a good track record on efficiency. I grant that to the Minister, but he should also face the fact that severe questions surround the estimates on the changes to Scottish local government that he has provided to the House. The estimates of other bodies seem to be a good deal more competent and soundly based than the Minister's. Apart from the Convention of Scottish Local Authorities and other participants in the debate, independent organisations such as the Chartered Institute of Public Finance and Accountancy are severely critical of his estimates. The range of estimates also tend to show that the Minister is not confident about the figures that he has put forward.
As the Minister knows, before I fell among thieves in this place, I used to turn a penny as a professional economist. It was well known in the economics profession that, to safeguard one's back against future inquiry, one

could conduct a scenario analysis. One would present not a single figure for projections and forecasts but a wide range of figures so that one might blunder into the right estimate. That appears to be exactly what the Government have done.
The hon. Member for Linlithgow (Mr. Dalyell) asked the Minister a question last Wednesday. Incidentally, the hon. Gentleman should be running a seminar on how to ask questions during Scottish questions, from which many hon. Members might benefit. When he asked the Minister to give to the nearest £10 million his latest estimate of the changes in Scottish local government, the Minister's eyes glazed over. At the very least, that should not make us confident that there had been a proper and adequate financial examination of the figures.

Mr. Dalyell: I do not know whether I fall into the category of thieves among which the hon. Gentleman has fallen in this place, but I do agree with him that we have not had from the Scottish Office any suggestion of the way in which it has arrived at its figures. At the least, it owes the Chartered Institute of Public Finance and Accountancy and the rest of us some explanation of how it has arrived at its figures because, bluntly, Miss Anna Capaldi and her Touche Ross figures have just been exposed as being totally flawed—in fact, I do not know how Touche Ross got taxpayers' money.

Mr. Salmond: I happily exclude the hon. Gentleman and myself from the category of thieves into which we have both fallen. I am not so sure that I would be excluding Touche Ross, if we consider the benefits that have been gained for itself from its expensive report into the financing of Scottish local government. I think that the argument has been well made once again by the hon. Gentleman.
I want to make two final arguments, in summary. I hope that the Minister will not continue to make the argument that I hear sometimes from his lips, that somehow, when the Convention of Scottish Local Authorities, which is the representative organisation for local government, says something it is necessarily in the pockets of the Opposition parties and necessarily its viewpoints and arguments must be disregarded. I merely draw to his attention the fact that the president of COSLA, Charles Gray, is one of the more independent-minded members of the Labour party in Scotland and has a known track record of saying things in an extremely independent way. When someone such as Charles Gray makes comments on those matters, his arguments deserve to be taken on their merits. I should like some indication, at least, that the Minister is prepared to do that and not allow Charles Gray to fall victim to the "Stalinist tendency" that has been identified in the ranks of certain political parties in Scotland.
Secondly, and lastly, I should like the Minister to show some appreciation of the fact that the debate is not just another ritual debate about the revenue support grant orders. As the hon. Member for Provan reminded us, the debate affects finance, and real services which affect real people. I hope that if the House gives leave to the Minister to sum up the proceedings this evening, there will be some sign in his closing speech—which I do not think was there in much of his opening speech—that he realises the importance to people of the services that we are debating this evening.

Mr. John McAllion: The debate has been characterised by some excellent contributions by Opposition Members and by total ignorance about local government displayed by Conservative Members.
I begin by paying tribute to my hon. Friend the Member for Glasgow, Provan (Mr. Wray), who made a tremendously passionate and clear speech about the implications of the orders for ordinary people outside the House. The hon. Member for Banff and Buchan (Mr. Salmond) was equally right when he drew attention to the ritualistic nature of the way in which we debate rate support grant orders and housing support grant orders. They become just another item on the agenda of the business of the House and we sometimes forget how much they matter to people and how measures that we can joke about and make cheap debating points about across the Chamber affect people's lives and mean more suffering and more deprivation for everyone. It is important that we try to remember that and keep our remarks to the point of the debate.
This is a very disappointing settlement for local authorities in Scotland, and it is not only hon. Members who have long experience of local government who are saying that but local government itself. Of course the Minister would argue back that local government "would say that, wouldn't it", saying that it has an interest to argue that it is a poor settlement. As the hon. Member for Banff and Buchan said, the objective analysis of the settlement that is provided by the House of Commons Library suggests that the settlement is worse than does the analysis by COSLA. We should keep that in mind when we consider the figures.
The hon. Member for Kincardine and Deeside (Mr. Kynoch) drew attention to the fact that most local government expenditure is tied up with employing people; the wages bill accounts for most of it. Ingeniously, he argued that we can cut that out of the rate support grant settlement—freeze employment, not think about employing any more people and so on. He said that the settlement is generous if one considers only the 40 per cent. expenditure that remains after one thinks about employment.
I draw to the attention of the hon. Member for Kincardine and Deeside the fact that the local government services that are provided across Scotland are people-intensive. They have to be people-intensive. They are about employing people. Government statistics show that there are more pensioners in Scotland, and more people aged over 85, than there ever have been before. That fact in itself means that local government needs to employ more people to look after the elderly. There will have to be more home helps and social workers—residential and domiciliary—and more warden support and meals on wheels. The provision of such services means people being employed to deliver them—there is no way around that. One cannot exclude people costs.

Mr. Kynoch: Does the hon. Gentleman accept that the figure that I cited for the revenue support grant increase excluded community care and that the increase in revenue support grant could be applied to the non-wages element if the wages element were frozen?

Mr. McAllion: The hon. Gentleman says that the figure that he cited excluded care in the community; but it is not

only care in the community that is people intensive; all the services provided by local government are people intensive. For example, everyone admits that crime is a massive problem in Scotland, especially in the urban areas. There are more offenders than ever before. Local councils provide offender services and need social workers to look after offenders. Victim Support is in its infancy in Scotland and if it is to grow and if victims are to get the proper care and attention that they require, that will have to be provided by local authorities and regional councils and the social workers employed by them.
It is disingenuous of the hon. Member for Kincardine and Deeside to argue that we can discuss local government services without talking about local government employees. Local government services are all about local government employees. If one reduces the number of local government employees, one reduces local government services to people who need them. If Conservative Members do not understand that simple fact, they do not deserve to be representing their constituencies.

Mr. Bill Walker: I happen to agree with the hon. Gentleman that local government services are largely about people doing jobs on behalf of the community. I also agree with what he said about issues such as law and order—we all think that more money should probably be spent. However, a large percentage of the cost involved in the provision of services is taken up by human factors such as wages. There is nothing odd about that. Retail distributors know that it is not uncommon for 60 per cent. of their costs to be accounted for by wages, but one can increase efficiency and make savings by changing the way in which services are delivered. The hon. Gentleman must accept that that is as true in local government as it is in distribution.

Dr. Norman A. Godman: In other words, reduce employment.

Mr. McAllion: My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has answered the hon. Gentleman's point. The retail industry is all about low wages, reducing the number of employees and cutting corners. One cannot cut corners when providing services for vulnerable people. Cutting corners in the provision of such services means that the vulnerable suffer and end up being sacrificed for the sake of levying a council tax lower than might otherwise have been the case had proper services been provided by the local authority. That is what Conservative Members favour.

Mr. Ian Davidson: Does my hon. Friend agree that, when the hon. Member for Tayside, North (Mr. Walker) refers to the need for efficiency and compares public services to retail, he is making a fundamental mistake? One cannot compare a home help with someone working in retail, in a shop. If efficiency is to be improved, presumably a home help will have to look after more old people. A better service would result in home helps looking after fewer people more intensively, which is the very opposite of private sector efficiency.

Mr. McAllion: My hon. Friend speaks from direct and recent experience of working on a major regional council. He knows what it means to deliver services to people in a large part of Scotland. If some Conservative Members had come from a local government background, we might not be debating such orders.

Mr. Bill Walker: rose—

Mr. McAllion: I cannot give way again. I must make progress. The hon. Gentleman has been here since 1979 and it is many years since he worked in local government, if he ever did.
I believe that a copy of the brief from the Convention of Scottish Local Authorities has been given to every hon. Member. The first sentence states:
The Convention re-affirms its earlier view that on average Council Tax bills are likely to increase by about 10 per cent. or £1·20 per week next year as a result of the settlement proposals".
COSLA is not saying that the council tax will increase because inflation is going up, because local authority wage settlements are going up or because local authority services are being increased; it is talking about council taxes going up by £1·20 as a direct result of the revenue support grant that the Government have made available to local authorities in Scotland.
That example is not an isolated one. As many hon. Members have pointed out again and again, it is only two weeks since we debated an order on the housing support grant which will inevitably increase rents across Scotland. We have also recently heard about the increase in NHS prescription charges. We have heard about the massive increases in income tax that the Government are to introduce in April. We all know about VAT on fuel. If we consider all those things together, a pattern begins to emerge. The Chancellor of the Exchequer has set himself the target of eliminating the public sector borrowing requirement, which currently stands at £45 billion, by 1997–98. He will do that by cutting public services in every way that he can think of. One way is to cut back on the funding for local government, as the order shows.
COSLA makes that point very clearly. It says that the level of grant-related expenditure for next year is well below the figures that it has identified as being necessary to maintain the level of services available in local authorities at the moment. If COSLA says that the amount is not enough even to maintain services, against a background of increasing unemployment in Scotland—that is the official level of unemployment and not the unofficial level, which is much higher—and against a background of massively increasing poverty in Scotland, what does that imply for ordinary people whom we are meant to represent here?
Tayside regional council social work department recently sent me a report. It considered the figures from the 1991 census. It went through a number of the changes in my part of Scotland over the past 10 years. I suspect that they are fairly typical of what is happening in the rest of Scotland. The department pointed out that there has been a massive increase in the percentage of single-parent households. As there are more single-parent households, there is a need for greater child care facilities to be provided through local authorities.
There is also a need for more nursery provision through local authorities and there is a need for more bridging schemes to allow single parents to make the jump from relying on benefit to going back into employment. There is a need for employment schemes to be run by local authorities. There is a massive need for local authorities to increase their expenditure at a time when the Government are cutting the RSG that is available to local authorities in Scotland.
The department points out that, over the past 10 years, there has been a large increase in the percentage of people

living in the area who are recorded as being permanently sick and who are on invalidity benefit. The Secretary of State for Social Security has already told us that he intends to eliminate about 700,000 people who are currently in receipt of invalidity benefit. When they come off invalidity benefit, they will go back on income support. They will then need social work services which are provided through the local authority. When they look to the local authority to provide those services, they will find that the Government have cut the grant and that the local authorities are, therefore, unable to help them. The situation will be even worse than it is at the moment. So it goes on.
The percentage of low-income families across the city of Dundee has not changed since 1981. On many occasions, I have heard the hon. Member for Dumfries (Sir H. Monro), the Under-Secretary, shout about the British economic miracle that took place in the 1980s. Where was the British economic miracle in Dundee, in Glasgow, in Edinburgh or in Aberdeen? The percentage of people living on low incomes is the same as it was 10 years ago. The economic miracle bypassed them; they have never had access to it. Those people need strong local authorities which are able to provide them with the services that they need.
One point that has not been brought out concerns the aggregate external finance figures which are provided in the order. They show, for example, that Tayside region will get a percentage increase next year of 2·2 per cent. As has been pointed out time and time again, that does not make an allowance for care in the community. Once we make an allowance for that, we are talking about a very small increase of less than 1 per cent. or even about a cut, yet councils will face increased demands for their services. There will be a cut in the aggregate external finance available to Dundee district council.
The grant-aided expenditure figures within the aggregate external finance figures show that Tayside regional council will have an increase of 2·56 per cent. The Secretary of State will use that figure for capping purposes. The right hon. Gentleman is actually encouraging Tayside regional council to increase its expenditure above the funding that he is making available to it. That argument applies even more to Dundee district council; its grant-aided figure allows for an increase of up to 5 per cent. but funding is not provided to cover it.
In effect, the Minister is saying that he is withdrawing central Government support for local government services. At the same time, he is allowing local councils to increase their expenditure, in the hope that he will make local council tax payers pay for that before the Secretary of State steps in to cap the councils. The Secretary of State is desperate to cut public expenditure and he is doing so by back-door methods. He hopes that, at the end of the day, local authorities will be forced to increase their council tax and that they will be blamed for that, and that he and the Government will not be blamed for cutting support for local authorities. That is completely despicable.
It is assumed that any pay awards will be met from efficiency savings. We have heard much nonsense about what that means. Teachers and local government workers have made pay demands which are in excess of 10 per cent. If even 50 per cent. of their demands are met, there will be tremendous cuts in local government services.
We have heard much about efficiency savings. The hon. Member for Tayside, North (Mr. Walker) said that one of


the greatest efficiency savings that could be made arises from school closures. Do Conservative Members think that they should advocate school closures when people in Scotland are calling out for child care facilities and increased nursery provision? The only matter that we are discussing is how to shut schools and pay off teachers to make savings for local authorities. It does not make sense.
The hon. Member for Tayside, North referred to schools falling below what he called the economic level. I remember that argument being used in respect of the mines back in 1984. Uneconomic pits had to be shut down. Why do not Conservative Members, in particular the hon. Member for Dumfries and the right hon. Member for Galloway and Upper Nithsdale (Mr. Lang), use that argument about farmers? Why do they not say that uneconomic farms have to close down? Why do they pay surpluses to farmers? Why do they subsidise them to set aside fields that they do not even farm? They actually give them public money to do that. We never hear Conservative arguments about economic farms because farmers generally vote Tory. That is why the Government are prepared to pay massive subsidies to farmers.
When it comes to schools and children's futures, we hear Conservative Members talk nonsense about uneconomic schools and having to close them down and leaving kids on the scrap heap. It is no wonder people turn to drugs or to crime, bearing in mind the way that they are treated by the Government. If the debate proves anything, it proves what the Scottish people have always said—that is, that the Conservative party is not fit to be in government. The sooner the people in the south of England realise that, the better it will be for the whole United Kingdom.

Mr. Eric Clarke: I shall be very brief because some of my hon. Friends also want to speak.
I should like to add to what my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) said about the Lothian region. The people whom I represent in Midlothian district council pay regional and district council rates. Midlothian district council has told me that its grant-aided expenditure for 1994 means a reduction of 0·46 per cent. When we boil that down to money, we see that the district council will lose £439,000 out of a budget of £10·287 million.
The gearing effect means that the council tax will rise by 20 per cent. We will have that against a backcloth of unemployment, a wage freeze, lower-paid workers, and even VAT on fuel. The Secretary of State has told us the expenditure that it is appropriate for authorities to spend. Where will economies be made? They will be made among people who can least afford them.
The hon. Member for Eastwood (Mr. Stewart) is listening not to me but to one of his colleagues who would say that what I am saying is a load of nonsense anyway. It is not nonsense. I am making a plea on behalf of not only my constituents but many others in a similar plight who pay rates to district councils.
I was a county councillor and a regional councillor for 16 years and I know what it means when the Government make cuts. I fought against both Labour and Tory Government cuts in the past. I became the ex-chairman of

the Labour group because I fought against the Callaghan Government on cuts. I was not elected to local government for cuts; I was elected to give services to the people whom I represented. That is what we are trying to do here. We are trying to tell the Government that public expenditure cuts are bad. Tory Members, the Minister and the Government seem to think that cuts in public expenditure are great. That is the way with rates and everything; the stock exchange will hit the ceiling.
Many companies are waiting for the day when the Government start to spend money in local government. I see that as a way of getting out of the recession and giving people what they deserve. There are many other things that the Government are delaying for which we will have to pay a high price in the future. I am talking about the renewal of sewers, housing, hospitals and many other things that come under the so-called umbrella of capital expenditure.
The people of Midlothian are no different from anyone else. They have had cuts. All their industries have been decimated—the coal industry, the carpet industry and the paper industry before that. Many industries, especially electronics, were brought in supposedly to save the locality that I represent. However, we find that they are moving out.
All I can see is an area that needs help and a council that cares. By the way, we may be hoist by our own petard because the council spends money on making the place more beneficial to investors and others in the area. There is hidden poverty behind the facade of so-called prosperity. When we look at the unemployment figures and so on, we see that there is poverty in the community. I have made many appeals to the Secretary of State on behalf of our young people. They cannot get jobs in the collieries or elsewhere. This direct cut in district council expenditure is one of many cuts that these people cannot afford.
I am making a plea to the Secretary of State and I want an answer: how can the Government justify this cut? What have the people of Midlothian or Scotland done to deserve it? Is it the result of the Government's incompetence? As I see it, it goes back to black Wednesday. We are all paying the price for the incompetence of the Chancellor of the Exchequer and the Government.

Mr. Thomas Graham: Once again, the Secretary of State and the Minister have got the situation wrong with regard to Scotland. They have come forward with proposals that will mean further cuts in the quality of life for the people whom I represent.
Undoubtedly, some of the profound statements made by my hon. Friend the Member for Midlothian (Mr. Clarke) went into the deaf ears of the Minister who will blunder on tonight and make the usual decision—cuts, cuts and cuts. He will not listen to my hon. Friend's plea for social services, home help and services for the mentally handicapped. We have already heard pleas about dealing with crime in Scotland. Once again, the Minister will do nothing to help to reduce crime in Scotland, which will continue to rise. We will continue to have the problem of drug barons having more money than the police to furnish their evil trade in drugs.
Earlier, I made an intervention on my hon. Friend the Member for Glasgow, Provan (Mr. Wray) about nursery provision, for which there is a tremendous demand in my area. Unfortunately, local government does not have the


wherewithal because of the Government's continued savage denial of local finance. Local government cannot get young folk into pre-five education quick enough because there is not enough money.
I hope that the Minister is listening to the point that I am going to raise. Scotland has one of the longest coastlines in Europe; we have literally thousands of miles of coastline. Scotland is one of the most important countries for tourism in Europe, and certainly 'we contribute a considerable amount to the coffers of Great Britain. Tourists come not just to visit the City of London, Manchester or Birmingham, but to visit Scotland. The revenue that that provides to this country is enormous. If we spent some time, consideration and money in that area, that revenue could increase.
I remember not long ago the town of Salou in Spain was castigated in the papers, and rightly so, for sewage problems which created an unhealthy situation for tourists. Did that fall on deaf ears? No. The people of Spain and Salou realised the consequences of that and proceeded not to bury the sewage or hide it out of sight, but to do something about it. They spent £250 million to solve the problem and to make sure that Salou became an admirable, decent and healthy place to go and have a holiday.
The Government do not recognise the role that local government has to play to ensure that the environment in Scotland is brought up to a decent standard. That would ensure that the American, Canadian, Australian and Japanese tourists all come and spend their money. But what do the Government do?
I often fly to London, and the situation has got that bad that one can see the devastation from up in an airplane. One can see quarries unfilled, and dirty and dank places. When one drives through Britain, what does one see? Rubbish is dumped by the side of the road. There is household and domestic rubbish and, worse, there is business rubbish from businesses which cannot afford to pay the going rate. They are tipping on the fly at night all around the country, and especially in Scotland.
Renfrewshire is becoming one huge tip, because the Government are not providing enough money to allow local companies to develop and dump their rubbish legally. I also use the train, and when I go through Britain and look out of the window it is an appalling sight. There is rubbish strewn about everywhere, and falling buildings and devastation. The Government do nothing.
At one time, folk used to sing songs about the River Clyde. "What a wonderful place, the name of it fills me with pride". If you were going up the Clyde in your wee boat tonight, Madam Speaker, you would need a big brush to clean away the stuff at the side of it after you docked it. I can assure you that our beautiful beaches have been turned into rubbish dumps.
The Minister does not need to believe me. I am sure that he will believe one of the great newspapers of Scotland., the Evening Times, which mentioned that about 40,000 pieces of rubbish had been dug up from a stretch of about one mile on the Ayrshire coast. That is not very far from where the Minister and I live. We do not just fly over rubbish or drive through it—we also sail thorough it.
The Government have not taken on board the serious point that if we wish tourists to come and spend money in Scotland, we must ensure that local government gets sufficient money to clean up our beaches. We must ensure

that the water supply meets the standards of the European directive, and we must ensure that our sewerage system is the best in the world, and not the worst.
I say to the Minister that, once again, the people of Scotland are getting a shabby deal from the Government. Once again, the Government are savagely reducing the quality of life. Once again, they are denying our people the ability to make a decent living, by failing to ensure that there is a solid and decent tourist industry. I shall finish on this note: why does the Minister not do the right thing and resign?

Mr. Tam Dalyell: Madam Speaker, time-wise we need to press on, but I should like to say that I am appalled by the consequences of the unpicking of the Lothian social work department. My hon. Friends the Members for Edinburgh, Leith (Mr. Chisholm), for Carrick, Cumnock and Doon Valley (Mr. Foulkes), who was a councillor in Edinburgh, and other colleagues have outlined general worries. In view of the time, I shall simply ask six precise questions following long and detailed conversations with John Chant, who is the longest serving director of social work in Britain. He has rightly been awarded a CBE for his work.
First, in removing the statutory requirement to establish a social work committee and appoint a director of social work, how does the Minister envisage that the new councils will carry out their statutory and other responsibilities to provide for the social welfare of their community and ensure accountability for the development of policy and the delivery of service? That question has not yet been answered.
Secondly, is the Minister confident that all of the new councils will be of a size that will enable them to provide the full range of services currently offered by mainland regional social work departments? I pay tribute to what has been done in Strathclyde, Lothian, Tayside and elsewhere in the advancement of social work in recent years. It is a crying shame—I shall not use stronger language—that all the work should be unpicked when Members of Parliament know at first hand from our day-to-day work how it benefits our constituents.
Thirdly, what requirements does the Minister intend to place on the new councils to ensure the preparation of community care plans and plans for the development of criminal justice and child care services? What steps does he intend to take to ensure that such plans are drawn up by people with the relevant qualifications and experience? It is far from clear that the smaller new councils will have such people, particularly specialists.
Fourthly, how does the Minister intend to ensure that the new councils put in place proper systems of professional accountability, develop social care policies, provide appropriate services and deliver those services in an accountable manner? How is that to be done? We have not been told.
Fifthly, in the absence of a social work committee or a director of social work, what arrangements does the Minister propose to make to ensure that sufficient staff are trained and deployed to meet the statutory requirements of the mental health and child care legislation? There has been no indication of how that will be done. My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) knows a great deal about such matters.


Unfortunately, he serves on the Standing Committee which is considering the Criminal Justice Bill, not the Committee considering the Local Government etc. (Scotland) Bill.

Dr. Godman: Does my hon. Friend accept that the burdens that are placed on our social work departments will be exacerbated by many of the clauses in the Criminal Justice Bill? Those additional burdens have been ignored by the odd-job lot on the Conservative Benches.

Mr. Dalyell: As the member of the Scottish Labour group on the Criminal Justice Bill, my hon. Friend is in a position to know. It is a serious matter.
Sixthly, local authorities are now substantial purchasers of social care services. How do the Government intend to ensure that local authorities give first consideration to the needs of the person to be served and the quality of care provided? What steps have been proposed to avoid service provision being led solely on the basis of cost? Do the Government intend to require local authorities to consider and evaluate any proposed contract for the provision of social care services by a suitably qualified or experienced person?
All my colleagues on the Opposition Benches could go on and on about the subject. Those questions have to be answered very soon and not at the fag end of the Committee stage of any Bill.

10 pm

Mr. Henry McLeish: The debate has once again highlighted the divide in the House on local government issues. One the one hand, the Government and their supporters are unwilling, on any occasion, to praise the tremendous work done in Scotland by the employees who provide some of the best services that one can find anywhere in Europe. We have heard the usual snide comments about inefficiency and lack of value for money. That is not the local government scene that Opposition Members know. We know that local government provides excellent services in Scotland and it would at least show a little humility if the Government sometimes allowed their consciences to get the better of them and if they praised the excellent work that is done.
On the other hand, Opposition Members praise the work going on. We have to sit through debates on local government in Committee and in the House, but we hear precious little appreciation of the efficiency, effectiveness and economy demonstrated by Scottish local authorities, in the face of the tremendous difficulties that have been heaped on them year after year by the Conservative Administration.
The contribution by my hon. Friend the Member for Glasgow, Provan (Mr. Wray) was one of the highlights of the debate. He made a passionate speech and spoke at first hand about the real issues facing Scotland and the real context within which the revenue support grant settlement should be viewed. He mentioned poverty, unemployment and many of the other problems that local authorities are trying to tackle. Sadly, they are doing so in very difficult circumstances because of the Government's policies, attitudes and prejudices.
Such debates are always characterised by technicalities. The Government like to hide behind a smokescreen of revenue support grant orders. We hear from Government

Ministers that every order is better than those of the previous year. We hear that the order will allow councils to cut council taxes and to expand services. If any of that were true, there might be something in Government policies for Opposition Members to praise, but the local government settlement does none of those things. It is another smokescreen to hide continuing cuts at the very heart of local government in Scotland.
As if the local authority settlement were not bad enough, the existing problems of cash-starved services endure. We can see that from the problems with crime, care in the community, housing and—at a time of rising unemployment—economic development.
One other consideration will loom large for the Government and for Ministers during the next two or three years—reorganisation. How eloquently my hon. Friend the Member for Linlithgow (Mr. Dalyell) posed his questions about this crazy reorganisation and the bill, which will have to be measured in higher council taxes for the Scots or in massive cuts in services and dramatic job losses.
That is the price that we are paying and will continue to pay for the Government's incompetence and mismanagement of the Scottish economy and—what is more important—for a Government who, after 15 years, have refused to face up to the fact that we have genuine and endemic structural problems in Scotland, which are not being tackled.
This evening, it is important for us to move beyond the reckless and irresponsible behaviour of the motley crew on the Government Benches and to talk about the settlement. We have heard that, in cash terms, it is supposed to be yet another that captures the plaudits, as far as the Government are concerned, but nothing could be further from the truth.
Over the next three years, we will witness a cut of a third of £1 billion in real terms from local authority budgets. How can that be squared with an excellent settlement on revenue support? It simply cannot, because significant real terms cuts will be made. How do the Government measure up to that? Is the Minister willing to explain away that cut or is he willing to carry on with the smokescreen in an attempt to deceive Scottish public opinion into thinking that we are making significant progress?
Another issue that we must consider is the naive simplicity demonstrated, once again, by Conservative Back Benchers. We have heard, of course, of the links between the local authority settlement and the possible cuts in or freezing of council tax levels. The Government do not understand that those levels are based on a number of factors, not just the revenue support grant settlement. Those factors include expenditure levels, the possibility of capping and non-statutory expenditure in which many local authorities are involved. My own regional council, for example, provides one of the best concessionary transport systems anywhere in Britain. For its trouble, however, it does not get a penny from this mean Government.
The Prime Minister is always talking about expanding nursery provision, but "Where's the beef, Prime Minister?" In Scotland, some of the excellent provision does not get any help from the Government. We have heard enough from the Government about how they help out local authority services, but in key services non-statutory spending is going ahead because Labour councils care about and appreciate real need, unlike the Government.
The Government's settlement falls well short of what would be needed, in real terms, to keep ahead of inflation. At a time of massive problems, it also falls well short of the expectations of Scots. It falls well below the expectations of local authority leaders. Senior officials in local government, of course, know at first hand the problems that they face.
We must also consider services. The settlement will do nothing to deal with the 1 million crimes that are committed in Scotland every year. We have a crime epidemic under the so-called law and order party. The settlement will not provide for an extra policeman or provide an extra opportunity for a young person involved in crime to be caught. Once again, we see the nonsense of a settlement that does not match expectations in an area where the Government are trying to take credit.
As my hon. Friend the Member for Provan said, the settlement will not help to tackle the endemic problems of poverty. Some 900,000 Scots, or one in six, live in families where income support is the only source of income. How do the orders square with the reality of misery for hundreds of thousands of people in Scotland and nearly 250,000 children under the age of 16? They simply do not. The Government are trying to deceive all who listen to their hollow promises about real improvements in revenue support grant.
Unemployment has been mentioned by my hon. Friends. The Government have seen unemployment rise in Scotland by nearly 4,000 a week in the past month. Again, they are constraining our local authorities from tackling economic development in the way that they want. We could put the unemployed back to work. Our local authorities could help. We could give the young people the skills that they need, but we need the tools to do that. That means hard cash, not vacuous comments from a Government who simply do not care, but who try to deceive people into thinking that they do.
According to the revenue support grant settlement, £5 million will go towards local government costs of reorganisation. Even by the Government's estimates, however, those costs will be £200 million. According to COSLA's expectations, they will be nearly £720 million. Once again, however, we find that the Government will not provide any substantial help towards the massive costs involved.
The settlement is a bad one by any stretch of the imagination. It is a settlment that will steal a third of £1 billion from local authorities and will not go even towards providing the costs, of up to £720 million, of the crazy reorganisation. The message to Government is clear and simple: you can fool some of the people all of the time, but Scots believe that it is time for a rethink about the need for serious money to tackle the serious problem that Scotland is enduring.

Mr. Stewart: May I make three points in winding up the debate? First, the hon. Member for Fife, Central (Mr. McLeish) criticised a speech that I did not make rather than the one that I made. None of my hon. Friends has criticised the hard work done by many people in local government. whatever their political party, and officials throughout Scotland.
Secondly, I understand that the Opposition intend to vote against the orders. The hon. Member for Hamilton

(Mr. Robertson) confirmed that. As we know from the press, he is a man of great parliamentary guile and, as he constantly boasts, lots of Conservative Members will doubtless vote with him in the Lobby. I point out for the record that, if he succeeds in the vote on the first order, he will deprive local authorities in Scotland of £31·8 million to which they are entitled. If he succeeds in the vote on the second order, he will deprive local authorities in Scotland of £100 million a week from the beginning of April. But if that is the Labour party's policy, so be it.
Thirdly, I have wound up these debates when the right hon. Bruce Millan and the hon. Members for Glasgow, Garscadden (Mr. Dewar) and for Monklands, West (Mr. Clarke) have led for the Opposition. All three right hon. and hon. Gentlemen had one thing in common: they gave every impression that they had read the orders and were aware of the details and figures concerned. The hon. Member for Hamilton hardly referred to the order.

Mr. Salmond: Will the Minister give way?

Mr. Stewart: No, I must get on for a moment.
My hon. Friends the Members for Tayside, North (Mr. Walker), for Kincardine and Deeside (Mr. Kynoch), and for Ayr (Mr. Gallie) rightly supported the orders.
Before I deal with some of the general points that have been raised, may I respond to some of the detailed points? The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) made a fair point about the usefulness of planning for current local authority expenditure. I accept that point in principle, which is why last year, for the first time, my right hon. Friend the Secretary of State announced not only Government support expenditure and aggregate Exchequer finance figures for 1994–95, but his plans for the forward two years of the 1993 public expenditure survey—1995–96 and 1996–97. The hon. Gentleman will accept the constraints, but in principle he made a fair and proper point.
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) argued that the client group methodology was biased against rural authorities. I have heard urban authorities argue that the methodology is biased in favour of rural authorities, but representations from his authority and others will no doubt continue.
The hon. Member for Aberdeen, North (Mr. Hughes) asked me a specific question about the differences in the distribution between the city of Aberdeen and Kincardine and Deeside. Those relate to the two authorities' different loan and leasing charges this year. As it is fairly late in the evening, may I write to the hon. Gentleman explaining that point in detail?
Throughout the debate, Opposition Members have argued that local government in Scotland was badly treated by this Conservative Government compared to the last Labour Government. I remind them that, on the 1977–78 settlement, the president of COSLA said:
To have been told by the Secretary of State that the percentage grant was being savagely cut by 4 per cent. was something none of us expected.
I refer Opposition Members, including the hon. Member for Edinburgh, Leith (Mr. Chisholm), to an excellent recent article by David Begg, chairman of the finance committee of Lothian regional council.

Dr. Godman: Will the Minister give way?

Mr. Stewart: Mr. Begg is much respected by Opposition Members, and he has said that, according to his


estimates, local government employment has increased in Scotland by 3.9 per cent., in full-time equivalent jobs. He went on, in the Local Government Chronicle of 9 February, to say that his figures
destroy the myth that 14 years of Conservative Government have decimated services and destroyed jobs.
I commend the article to Opposition Members.

Mr. Salmond: On a point of order, Madam Speaker. Am I right in thinking that the debate on the orders can continue until 11.30 pm? The Minister seems painfully unaware of that, given his refusal to give way to hon. Members who have sat through the entire debate. Is there some agreement to which neither you nor I is a party about when we must proceed to vote on these orders?

Madam Speaker: The hon. Gentleman is correct: I am party to no agreement. The debate can go on until 11.30 pm

Mr. Stewart: Thank you, Madam Speaker. I was about to give way to the hon. Member for Greenock and Port Glasgow (Dr. Godman)—I just wanted to get my point on the record.

Dr. Godman: Does the Minister intend to write to my hon. Friend the Member for Linlithgow (Mr. Dalyell) dealing with each of his six important questions about the operation of our social work departments? If so, will the hon. Gentleman be good enough to put a copy of his letter in the Library? They were criticial questions dealing with the need to continue the efficient operation of our social work departments.

Mr. Stewart: Of course, the hon. Gentleman's questions were in order, but he will recognise that they were not specifically related to the 1994–95 settlement. They were, however, related to the broader issues covered by the Local Government etc. (Scotland) Bill, and if the hon. Member for Linlithgow (Mr. Dalyell) raises those questions in Committee, I shall be happy to deal with them. If not, I shall of course respond to him in writing and put a copy of the letter in the Library.

Mr. Salmond: The Minister heard me refer to a Library analysis which seems to demonstrate a continuing squeeze on Scottish local government over the next three years. I know that the figures have been supplied to the hon. Gentleman by his new parliamentary private secretary—the hon. Member for Tayside, North (Mr. Walker). Does he broadly accept the Library's analysis?

Mr. Stewart: I believe that this is a realistic but tight settlement. Neither I nor my right hon. Friend the Secretary of State has ever said anything different. I would point out, though, that per capita expenditure in Scotland is 34 per cent. higher than it is in England and 26 per cent. higher than it is in Wales. I hope, therefore, that the hon. Gentleman will not maintain that Scotland is being hard done by in this settlement. The total level of support for Scottish local authorities, compared with support for English and Welsh authorities, is very high.

Mr. Salmond: On a point of order, Madam Speaker. There is a great deal of noise in the Chamber, and I am sure that the Minister missed my question about the Library figures—at any rate, he avoided answering it.

Madam Speaker: A number of conversations are going on. I do not want to stop them, but I should be obliged if they were not quite so noisy.

Mr. Stewart: I believe that, although the settlement is tight—nobody denies that—it is realistic in terms of the increases in local authority expenditure that have been made in Scotland in recent years against a background of the need for public expenditure constraint. I am grateful to my hon. Friends for warmly welcoming the settlement as realistic and reasonable. I commend the orders to the House.

Question put:—

The House divided: Ayes 305, Noes 266.

Division No. 148]
[10.19 pm


AYES


Ainsworth, Peter (East Surrey)
Cope, Rt Hon Sir John


Aitken, Jonathan
Couchman, James


Alexander, Richard
Cran, James


Alison, Rt Hon Michael (Selby)
Currie, Mrs Edwina (S D'by'ire)


Amess, David
Curry, David (Skipton & Ripon)


Arbuthnot, James
Davies, Quentin (Stamford)


Arnold, Jacques (Gravesham)
Davis, David (Boothferry)


Ashby, David
Day, Stephen


Aspinwall, Jack
Deva, Nirj Joseph


Atkins, Robert
Devlin, Tim


Atkinson, David (Bour'mouth E)
Dickens, Geoffrey


Atkinson, Peter (Hexham)
Dicks, Terry


Baker, Nicholas (Dorset North)
Dorrell, Stephen


Baldry, Tony
Douglas-Hamilton, Lord James


Banks, Matthew (Southport)
Dover, Den


Banks, Robert (Harrogate)
Duncan, Alan


Bates, Michael
Duncan-Smith, Iain


Batiste, Spencer
Dunn, Bob


Bendall, Vivian
Durant, Sir Anthony


Beresford, Sir Paul
Dykes, Hugh


Biffen, Rt Hon John
Eggar, Tim


Blackburn, Dr John G.
Elletson, Harold


Body, Sir Richard
Emery, Rt Hon Sir Peter


Bonsor, Sir Nicholas
Evans, David (Welwyn Hatfield)


Booth, Hartley
Evans, Jonathan (Brecon)


Boswell, Tim
Evans, Nigel (Ribble Valley)


Bottomley, Peter (Eltham)
Evans, Roger (Monmouth)


Bottomley, Rt Hon Virginia
Evennett, David


Bowden, Andrew
Faber, David


Bowis, John
Fabricant, Michael


Boyson, Rt Hon Sir Rhodes
Fairbairn, Sir Nicholas


Brandreth, Gyles
Fenner, Dame Peggy


Brazier, Julian
Field, Barry (Isle of Wight)


Bright, Graham
Fishburn, Dudley


Brooke, Rt Hon Peter
Forman, Nigel


Brown, M. (Brigg & Cl'thorpes)
Forth, Eric


Browning, Mrs. Angela
Fowler, Rt Hon Sir Norman


Bruce, Ian (S Dorset)
Fox, Dr Liam (Woodspring)


Budgen, Nicholas
Fox, Sir Marcus (Shipley)


Burns, Simon
Freeman, Rt Hon Roger


Burt, Alistair
French, Douglas


Butcher, John
Fry, Sir Peter


Butler, Peter
Gale, Roger


Butterfill, John
Gallie, Phil


Carlisle, John (Luton North)
Gardiner, Sir George


Carlisle, Kenneth (Lincoln)
Garel-Jones, Rt Hon Tristan


Carrington, Matthew
Garnier, Edward


Carttiss, Michael
Gill, Christopher


Cash, William
Gillan, Cheryl


Channon, Rt Hon Paul
Goodlad, Rt Hon Alastair


Clappison, James
Goodson-Wickes, Dr Charles


Clark, Dr Michael (Rochford)
Gorman, Mrs Teresa


Clarke, Rt Hon Kenneth (Ruclif)
Gorst, John


Clifton-Brown, Geoffrey
Grant, Sir A. (Cambs SW)


Coe, Sebastian
Greenway, Harry (Ealing N)


Colvin, Michael
Greenway, John (Ryedale)


Congdon, David
Griffiths, Peter (Portsmouth, N)


Conway, Derek
Grylls, Sir Michael


Coombs, Anthony (Wyre For'st)
Hague, William


Coombs, Simon (Swindon)
Hamilton, Rt Hon Sir Archie






Hamilton, Neil (Tatton)
Monro, Sir Hector


Hampson, Dr Keith
Montgomery, Sir Fergus


Hanley, Jeremy
Moss, Malcolm


Hannam, Sir John
Needham, Richard


Hargreaves, Andrew
Nelson, Anthony


Harris, David
Neubert, Sir Michael


Haselhurst, Alan
Newton, Rt Hon Tony


Hawkins, Nick
Nicholls, Patrick


Hawksley, Warren
Nicholson, David (Taunton)


Hayes, Jerry
Nicholson, Emma (Devon West)


Heald, Oliver
Norris, Steve


Hendry, Charles
Onslow, Rt Hon Sir Cranley


Heseltine, Rt Hon Michael
Oppenheim, Phillip


Hicks, Robert
Ottaway, Richard


Higgins, Rt Hon Sir Terence L.
Page, Richard


Hill, James (Southampton Test)
Paice, James


Hogg, Rt Hon Douglas (G'tham)
Patnick, Irvine


Horam, John
Patten, Rt Hon John


Hordern, Rt Hon Sir Peter
Pattie, Rt Hon Sir Geoffrey


Howard, Rt Hon Michael
Pawsey, James


Howarth, Alan (Strat'rd-on-A)
Peacock, Mrs Elizabeth


Howell, Rt Hon David (G'dford)
Pickles, Eric


Howell, Sir Ralph (N Norfolk)
Porter, Barry (Wirral S)


Hughes Robert G. (Harrow W)
Porter, David (Waveney)


Hunt, Rt Hon David (Wirral W)
Rathbone, Tim


Hunt, Sir John (Ravensbourne)
Redwood, Rt Hon John


Hunter, Andrew
Renton, Rt Hon Tim


Hurd, Rt Hon Douglas
Richards, Rod


Jackson, Robert (Wantage)
Riddick, Graham


Jenkin, Bernard
Rifkind, Rt Hon. Malcolm


Jessel, Toby
Robathan, Andrew


Johnson Smith, Sir Geoffrey
Roberts, Rt Hon Sir Wyn


Jones, Gwilym (Cardiff N)
Robertson, Raymond (Ab'd'n S)


Jones, Robert B. (W Hertfdshr)
Robinson, Mark (Somerton)


Jopling, Rt Hon Michael
Roe, Mrs Marion (Broxbourne)


Kellett-Bowman, Dame Elaine
Rowe, Andrew (Mid Kent)


Key, Robert
Rumbold, Rt Hon Dame Angela


Kilfedder, Sir James
Ryder, Rt Hon Richard


King, Rt Hon Tom
Sackville, Tom


Knapman, Roger
Scott, Rt Hon Nicholas


Knight, Mrs Angela (Erewash)
Shaw, David (Dover)


Knight, Greg (Derby N)
Shaw, Sir Giles (Pudsey)


Knight, Dame Jill (Bir'm E'st'n)
Shephard, Rt Hon Gillian


Knox, Sir David
Shepherd, Colin (Hereford)


Kynoch, George (Kincardine)
Shepherd, Richard (Aldridge)


Lait, Mrs Jacqui
Shersby, Michael


Lang, Rt Hon Ian
Sims, Roger


Lawrence, Sir Ivan
Skeet, Sir Trevor


Legg, Barry
Smith, Sir Dudley (Warwick)


Leigh, Edward
Speed, Sir Keith


Lennox-Boyd, Mark
Spencer, Sir Derek


Lester, Jim (Broxtowe)
Spicer, Sir James (W Dorset)


Lidington, David
Spicer, Michael (S Worcs)


Lightbown, David
Spink, Dr Robert


Lilley, Rt Hon Peter
Spring, Richard


Lloyd, Rt Hon Peter (Fareham)
Sproat, Iain


Lord, Michael
Squire, Robin (Hornchurch)


Luff, Peter
Stanley, Rt Hon Sir John


Lyell, Rt Hon Sir Nicholas
Steen, Anthony


MacGregor, Rt Hon John
Stephen, Michael


MacKay, Andrew
Stern, Michael


Maclean, David
Stewart, Allan


McLoughlin, Patrick
Streeter, Gary


McNair-Wilson, Sir Patrick
Sumberg, David


Madel, Sir David
Sweeney, Walter


Maitland, Lady Olga
Sykes, John


Malone, Gerald
Tapsell, Sir Peter


Mans, Keith
Taylor, Ian (Esher)


Marland, Paul
Taylor, John M. (Solihull)


Marlow, Tony
Taylor, Sir Teddy (Southend, E)


Marshall, John (Hendon S)
Temple-Morris, Peter


Marshall, Sir Michael (Arundel)
Thomason, Roy


Martin, David (Portsmouth S)
Thompson, Sir Donald (C'er V)


Mates, Michael
Thompson, Patrick (Norwich N)


Mawhinney, Rt Hon Dr Brian
Thornton, Sir Malcolm


Merchant, Piers
Thurnham, Peter


Mills, Iain
Townend, John (Bridlington)


Mitchell, Andrew (Gedling)
Townsend, Cyril D. (Bexl'yh'th)


Mitchell, Sir David (Hants NW)
Tracey, Richard


Moate, Sir Roger
Tredinnick, David





Trend, Michael
Whittingdale, John


Trotter, Neville
Widdecombe, Ann


Twinn, Dr Ian
Wiggin, Sir Jerry


Vaughan, Sir Gerard
Wilkinson, John


Viggers, Peter
Willetts, David


Waldegrave, Rt Hon William
Wilshire, David


Walden, George
Wolfson, Mark


Walker, Bill (N Tayside)
Wood, Timothy


Waller, Gary
Yeo, Tim


Ward, John
Young, Rt Hon Sir George


Wardle, Charles (Bexhill)



Waterson, Nigel
Tellers for the Ayes:


Watts, John
Mr. Sydney Chapman and Mr. Timothy Kirkhope.


Wells, Bowen



Whitney, Ray





NOES


Abbott, Ms Diane
Dafis, Cynog


Adams, Mrs Irene
Dalyell, Tam


Ainger, Nick
Darling, Alistair


Ainsworth, Robert (Cov'try NE)
Davidson, Ian


Allen, Graham
Davies, Bryan (Oldham C'tral)


Anderson, Donald (Swansea E)
Davies, Rt Hon Denzil (Llanelli)


Armstrong, Hilary
Davies, Ron (Caerphilly)


Ashton, Joe
Davis, Terry (B'ham, H'dge H'l)


Austin-Walker, John
Denham, John


Banks, Tony (Newham NW)
Dewar, Donald


Barnes, Harry
Dixon, Don


Barren, Kevin
Dobson, Frank


Battle, John
Donohoe, Brian H.


Bayley, Hugh
Dowd, Jim


Beckett, Rt Hon Margaret
Dunnachie, Jimmy


Bell, Stuart
Dunwoody, Mrs Gwyneth


Benn, Rt Hon Tony
Eagle, Ms Angela


Benton, Joe
Eastham, Ken


Bermingham, Gerald
Enright, Derek


Berry, Dr. Roger
Etherington, Bill


Betts, Clive
Evans, John (St Helens N)


Blair, Tony
Ewing, Mrs Margaret


Blunkett, David
Fatchett, Derek


Boateng, Paul
Field, Frank (Birkenhead)


Boyes, Roland
Fisher, Mark


Bradley, Keith
Flynn, Paul


Bray, Dr Jeremy
Foster, Rt Hon Derek


Brown, Gordon (Dunfermline E)
Foster, Don (Bath)


Brown, N. (N'c'tle upon Tyne E)
Foulkes, George


Bruce, Malcolm (Gordon)
Fraser, John


Burden, Richard
Fyfe, Maria


Byers, Stephen
Galloway, George


Caborn, Richard
Garrett, John


Callaghan, Jim
George, Bruce


Campbell, Mrs Anne (C'bridge)
Gerrard, Neil


Campbell, Menzies (Fife NE)
Gilbert, Rt Hon Dr John


Campbell, Ronnie (Blyth V)
Godman, Dr Norman A.


Campbell-Savours, D. N.
Godsiff, Roger


Canavan, Dennis
Golding, Mrs Llin


Cann, Jamie
Gordon, Mildred


Carlile, Alexander (Montgomry)
Gould, Bryan


Chisholm, Malcolm
Graham, Thomas


Clapham, Michael
Grant, Bernie (Tottenham)


Clark, Dr David (South Shields)
Griffiths, Nigel (Edinburgh S)


Clarke, Eric (Midlothian)
Griffiths, Win (Bridgend)


Clarke, Tom (Monklands W)
Grocott, Bruce


Clelland, David
Gunnell, John


Clwyd, Mrs Ann
Hain, Peter


Coffey, Ann
Hall, Mike


Cohen, Harry
Hanson, David


Connarty, Michael
Hardy, Peter


Cook, Frank (Stockton N)
Harvey, Nick


Cook, Robin (Livingston)
Hattersley, Rt Hon Roy


Corbett, Robin
Henderson, Doug


Corbyn, Jeremy
Heppell, John


Corston, Ms Jean
Hill, Keith (Streatham)


Cousins, Jim
Hinchliffe, David


Cox, Tom
Hoey, Kate


Cryer, Bob
Hogg, Norman (Cumbernauld)


Cummings, John
Home Robertson, John


Cunliffe, Lawrence
Hood, Jimmy


Cunningham, Jim (Covy SE)
Hoon, Geoffrey


Cunningham, Rt Hon Dr John
Howarth, George (Knowsley N)






Howells, Dr. Kim (Pontypridd)
O'Hara, Edward


Hoyle, Doug
Olner, William


Hughes, Kevin (Doncaster N)
O'Neill, Martin


Hughes, Robert (Aberdeen N)
Orme, Rt Hon Stanley


Hughes, Roy (Newport E)
Parry, Robert


Hughes, Simon (Southwark)
Patchett, Terry


Hutton, John
Pendry, Tom


Illsley, Eric
Pickthall, Colin


Ingram, Adam
Pike, Peter L.


Jackson, Glenda (H'stead)
Pope, Greg


Jackson, Helen (Shef'ld, H)
Powell, Ray (Ogmore)


Jamieson, David
Prentice, Ms Bridget (Lew'm E)


Janner, Greville
Prentice, Gordon (Pendle)


Jones, Jon Owen (Cardiff C)
Purchase, Ken


Jones, Lynne (B'ham S O)
Radice, Giles


Jones, Martyn (Clwyd, SW)
Randall, Stuart


Jones, Nigel (Cheltenham)
Raynsford, Nick


Jowell, Tessa
Reid, Dr John


Kaufman, Rt Hon Gerald
Robertson, George (Hamilton)


Keen, Alan
Robinson, Geoffrey (Co'try NW)


Kennedy, Charles (Ross, C&S)
Roche, Mrs. Barbara


Kennedy, Jane (Lpool Brdgn)
Rogers, Allan


Khabra, Piara S.
Rooker, Jeff


Kilfoyle, Peter
Rooney, Terry


Kinnock, Rt Hon Neil (Islwyn)
Ross, Ernie (Dundee W)


Kirkwood, Archy
Rowlands, Ted


Lestor, Joan (Eccles)
Ruddock, Joan


Lewis, Terry
Salmond, Alex


Litherland, Robert
Sedgemore, Brian


Livingstone, Ken
Sheerman, Barry


Lloyd, Tony (Stretford)
Sheldon, Rt Hon Robert


Llwyd, Elfyn
Shore, Rt Hon Peter


Loyden, Eddie
Short, Clare


Lynne, Ms Liz
Simpson, Alan


McAllion, John
Skinner, Dennis


McAvoy, Thomas
Smith, Andrew (Oxford E)


McCartney, Ian
Smith, C. (Isl'ton S & F'sbury)


Macdonald, Calum
Smith, Rt Hon John (M'kl'ds E)


McFall, John
Smith, Llew (Blaenau Gwent)


McKelvey, William
Snape, Peter


Mackinlay, Andrew
Soley, Clive


McLeish, Henry
Spearing, Nigel


McMaster, Gordon
Squire, Rachel (Dunfermline W)


McNamara, Kevin
Steel, Rt Hon Sir David


McWilliam, John
Steinberg, Gerry


Madden, Max
Stevenson, George


Mahon, Alice
Stott, Roger


Mandelson, Peter
Strang, Dr. Gavin


Marek, Dr John
Straw, Jack


Marshall, David (Shettleston)
Taylor, Mrs Ann (Dewsbury)


Marshall, Jim (Leicester, S)
Thompson, Jack (Wansbeck)


Martin, Michael J. (Springburn)
Turner, Dennis


Maxton, John
Vaz, Keith


Meacher, Michael
Walker, Rt Hon Sir Harold


Michael, Alun
Wallace, James


Michie, Bill (Sheffield Heeley)
Walley, Joan


Michie, Mrs Ray (Argyll Bute)
Wardell, Gareth (Gower)


Milburn, Alan
Wareing, Robert N


Miller, Andrew
Watson, Mike


Mitchell, Austin (Gt Grimsby)
Wicks, Malcolm


Moonie, Dr Lewis
Williams, Rt Hon Alan (Sw'n W)


Morgan, Rhodri
Williams, Alan W (Carmarthen)


Morris, Rt Hon A. (Wy'nshawe)
Wilson, Brian


Morris, Estelle (B'ham Yardley)
Winnick, David


Morris, Rt Hon J. (Aberavon)
Worthington, Tony


Mowlam, Marjorie
Wray, Jimmy


Mudie, George
Wright, Dr Tony


Mullin, Chris
Young, David (Bolton SE)


Murphy, Paul



Oakes, Rt Hon Gordon
Tellers for the Noes:


O'Brien, Michael (N W'kshire)
Mr. Alan Meale and Mr. John Spellar.


O'Brien, William (Normanton)

Question accordingly agreed to.

Resolved,
That the Local Government Finance (Scotland) Order 1994, a copy of which was laid before this House on 17th February, be approved.

Resolved,
That the Revenue Support Grant (Scotland) Order 1994, a copy of which was laid before this House on 17th February, be approved.—[Mr. Andrew Mitchell.]

Petition

Warre Drive and Snows Hill Crescent, Blackpool

Mr. Harold Elletson: I wish to present a petition on behalf of the Warren Drive and Snows Hill Crescent Action Group, whose members live in my constituency. They are concerned about proposals in Blackpool borough council's local plan for the area which would result in severe traffic problems, detrimental social effects and disastrous environmental consequences in the only open green spaces left in this otherwise densely populated residental area. The petition has been signed by 808 people.
The petition concludes:
Wherefore your petitioners pray that your honourable House do urge the Government to declare the said land to be public open space.

To lie upon the Table.

Traffic Growth (Blaby)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Andrew Mitchell.]

Mr. Andrew Robathan: It is fitting that I should follow the presentation of that petition, which was also concerned with yet further pressure of the growth of traffic.
I believe that the growth of traffic is one of the biggest long-term problems—if not the biggest—facing the United Kingdom today. In my constituency of Blaby in south Leicestershire, which used to be a rural area before 1962, much has changed. Not all the change has been good; some has been excellent, but most of that change has been due to the motor car. In 1962, the M1 was built up as far as Lutterworth. That was followed by the M6—the M6–M1 junction is in the south of my constituency—and then by the M69. Rural calm in my constituency has been shattered for ever as traffic growth on all roads has increased,.
The debate is aimed to express the unhappiness of my constituents arising from the growth of traffic, and to ensure that my hon. Friend the Minister for Roads and Traffic is in no doubt as to the scale of the problem in this one constituency, this one region of the country, but is repeated nationally.
The growth of traffic impinges on all aspects of life—first, and most obviously, noise. People cannot sleep at night. People are for ever with the hum of traffic in their ears. There is also pollution, and the carbon emissions from traffic relate to our Rio commitments.
We also have asthma, which is currently the subject of much debate in the newspapers, and general health problems. We have the danger from traffic. When I was a child, I used to bicyle to school. No longer is that possible. We have the real stress caused by the growth of traffic and congestion. We have damage to the environment. We also have light pollution, about which constituents are beginning to write to me, as innumerable road lights lead to one being able, as it was described at the weekend, to read a book throughout the night in many villages.
Forecasts vary, but most would suggest that traffic will approximately double in the next 30 to 40 years, and the Department of Transport's forecasts state, in a written answer to me, that the growth in car traffic is forecast to be between 57 and 87 per cent. between 1994 and 2025 and the growth in heavy goods vehicle traffic during the same period is forecast to be between 54 per cent. and 110 percent.
What is our response to be? Will we double the number of roads? I read from a letter that I believe encapsulates the situation. It is from a constituent who has lived on the Leicester road in Glen Parva for 25 years. He writes:
On first moving to my borne the road was an attractive elm tree lined avenue with light traffic even at peak times. Sunday was quiet and gardens in evening time were akin to being in the countryside. The 'dawn chorus' of birdsong was interrupted by isolated passing vehicles or at worst a single public service bus.
There has been an insidious deterioration of living conditions adjacent to the A426 over the years, at the root of which I consider to be the increase in vehicular traffic, its density, nature and behaviour.
Traffic noise under normal flowing conditions is now at such a level that normal conversation in the frontage of the house is not possible and proper rest within front bedrooms is elusive; the constant road noise of passing vehicles is disturbing. There is virtually no time of day or night—weekday and weekend—when no traffic noise is discernible.

He continues in the same vein. My constituent wants the Glen Parva bypass to be built. It has been planned; indeed, the proposals were drawn up 30 years ago.
Development has taken place in the region because it was believed that the road would be built to take the traffic flow but, understandably, people living near the proposed route are very upset. Ironically, the route follows two old and quieter transport systems—the Grand Union canal and a dismantled railway.
Although the Department of Transport has not funded the Glen Parva bypass this year, I believe that it will be built, backed by all the locally elected representatives in my constituency. But will it be enough? In 15 or 20 years' time, will we want another, wider road and will the Leicester road be congested again? I fear so unless we have an entirely new approach to dealing with traffic growth.
It was announced today that the M1 in the north of the constituency is to be widened to four lanes each way between junctions 21 and 21A in the next financial year, 1994–95. The M1 cuts deeply into Leicester Forest East, making life hell for those who live near it. Houses are blighted, and lives are disrupted.
Of course, the M1 was not so noisy when people bought their houses, and they want proper noise screening. Indeed, the Department of Transport has given an assurance that it will extend the planned noise screens all the way along the route through Leicester Forest East. However, my constituents and I want more. My constituents want proper compensation for the disruption of their lives, for the nightmare that their lives have become.
Sadly, the nightmare continues. At a recent Department of Transport presentation in the constituency, a civil servant from the Department said that the M1 would need to be widened further by the end of the decade. If that is true, will the Department consider buying properties now to end the anguish of my constituents who live alongside the route, or will it at least consider giving proper compensation?
I quote the chairman of Leicester Forest East parish council:
If the DOT predictions prove correct then we will have the situation that the Ml through LFE will be in a state of chaos for a period in excess of 10 years. The situation on the MI is indicative of the lack of long term planning which we are suffering from in all aspects of Government, we have just completed lane closures for installation of lighting, now we have lane closures because of Junction 21 A, next year lane closures for widening to 4 lanes, and in the near future closures for widening to 5+ lanes.
Again, that encapsulates the point of the debate.
Next to Leicester Forest East, the A46 Leicester western bypass is being built. It is cutting off the village of Glenfield from the villages of Groby and Ratby and from the Bradgate Park area to the north as it is built to a new junction—junction 21A—which was not planned when the motorway was built because traffic was much less.
Besides all the disruption and unhappiness caused by the building, two ancient footpaths, which are still used by many residents, mostly now for recreation, are being closed. My hon. Friend the Minister—we have corresponded on this—will tell me that they are not being closed, but being diverted. He has suggested to me a mile-long walk alongside this very busy four-lane dual carriageway.
I suspect that a mile-long walk along a four-lane dual carriageway is not many people's idea of recreation, especially if they are old, or if they have dogs or children


with them. I suggest that my hon. Friend chastises the civil servant who suggested that, because it is, frankly, ridiculous. In this case, as in so many, cars are being put before people.
Further south in the constituency, where the boundaries run with those of Leicester city, there is Narborough road south, which has become a major highway. Huge developments, including the opening of the MI and M69 junction—junction 21—have created vast traffic flows. What was a suburban road—a relatively quiet road—is now eight lanes of very busy traffic, with a dual carriageway in the middle and two service roads on either side. Leicestershire county council has recently imposed a 50 mph limit there, but to little avail. Trucks continue to thunder by, shaking people's houses.
Again, I shall quote a constituent, whose letter sums up everything that I wish to say:
Therefore, Government legislation is required for compensation to be granted for these properties…road works associated with the MI Junction Employment Area which are responsible for the following:

(1) Residents are unable to use front bedrooms and front living rooms due to excessive noise.
(2) Suffer from vibration of heavy vehicles.
(3) Cannot open windows due to traffic noise and air pollution.
(4) Property deterioration.
(5) Children cannot get readily to sleep.
(6) The effect of carbon emission on residents.
(7) Residents cannot sit peacefully in their gardens.
(8) Suffer huge loss in house value."
Those residents are too far from the road works to qualify for compensation, although their lives have been severely harmed. Their living environment has been spoilt. I urge the Government to compensate my constituents and at least to pay for double glazing. Above all, I ask the Government to look at the overall problem of the growth of traffic.
I now move south through my constituency to the market town of Lutterworth which was bypassed when the M1 was extended north in the early 1960s, having been built up to there in 1962. How calm it must have been when the M1 was built north—but no longer. Traffic streams through the centre and heavy goods vehicles shake all the buildings.
Already, a southern bypass is planned and will be built within the next two years. However, planners propose a box around Lutterworth, a western relief road to surround the town with heavy traffic.
Lutterworth is a popular place to live. Many new housing estates are being built, the houses in which command great sums. It is a popular place to live because of the quiet rural environment, with the fields between Bitteswell and the town where a small stream meanders. That is the site of the proposed western relief road, and that too will be destroyed for ever for short-term gain.
I hope that the road will not be built, and I urge my hon. Friend to resist the pressure from developers who are offering to build the road for the county council so that they can proceed with further developments. I urge my hon. Friend not to approve the scheme, but to look at the whole environment of the town, and, if action is required, as it may be, to put a new junction on the M1 north of the town, at junction 20A. The M1, after all, was built to bypass Lutterworth. Does it really need a second bypass not 30 years on?
Also in the south of the constituency is the A47, which was once a quiet country road. It now shakes to the passing of endless HGVs. It is very dangerous; there have been many accidents and some fatalities. Villages such as Walcote in my constituency were not designed for such traffic. The village is cut in half and ruined by the traffic.
Leicestershire county council has introduced some traffic calming, but with small effect. The building of the Al-M1 link, the A14, will be a palliative, but for how long? As it is, this new road has been driven through some unspoilt countryside, which we can ill afford to lose. It was described to me by my hon. Friend's predecessor as likely to be one of the last major new roads through virgin territory; I hope so, but we need a new approach.
Still in my constituency, the A5 is now intended to be dualled all its length. That will make another major source of traffic. Leaving aside new roads and new developments, even little villages are touched as roads carry more traffic than before—more traffic than they were designed for. Rural lanes become rat runs, and villages are spoilt by traffic, while the life of the villagers is degraded.
The huge problem of traffic growth affects everyone. Roads are designed and built to cure the situation, but in my constituency the Soar Valley way and Lubbesthorpe way were built not six years ago. They are, in effect, brand new roads, but they have already been dualled to cope with the extra traffic. If the traffic should double, as is predicted, what then? Will we have to double the size of those roads again?
I have demonstrated the problems of my constituency of Blaby, but if hon. Members would like a national example or an example in London, I refer to the M25, which has created huge traffic growth around London. People commute from Chelmsford to Chertsey. That is ridiculous, but it is being encouraged by road-building policies.
I ask the Government to take careful note: the problem will not go away. The Government are making sensible moves in the right direction, and I hope to encourage more tonight. I know that they are taking greater note of public transport needs. I received a letter from my right hon. Friend the Member for Kettering (Mr. Freeman) today, in which he said:
The Government is committed to a greener future for transport in Britain and wants to see the railways play their part.
It is excellent to hear that. Fifty years ago—perhaps even 35—I could have gone around my constituency by railway. I cannot do that now because of the Beeching axe. We must continue to encourage the return of freight and passengers to trains. We must also encourage everyone away from roads, I hope, by a policy of carrot and stick. We must enable cleaner, better buses and trains. I hope that rail privatisation will do just that for the railways. I applaud road pricing and the increased tax on fuel in the Budget.
I urge my hon. Friend the Minister to consider further provision and much firmer action. I urge, for instance, assistance for cyclists, encouragement for pedestrians and real assistance and encouragement. Leicestershire county council—to give credit where it is due—is very supportive of transport choice and of corridors. It is opening the new Ivanhoe line, it is assisting the cycleway from Dover to Inverness, through my constituency, and it is supportive of cycle paths. I applaud that, but I urge the Government to enable and assist further car sharing.
There is a new scheme called "Leicestershire", which is run by Environ, which used to be the Leicester Ecology Trust, in conjunction with de Montfort university. I heard


about it on Friday on a visit there. Many of my constituents drive into Leicester. I was astonished to discover that there are 47,000 empty car seats travelling into Leicester per day at peak times. Again, we should enable, encourage and assist car sharing.
Last week, the Leicester Mercury reported that four out of five drivers would support more environmental driving campaigns. In other words, they are prepared to change their driving habits. That is what we all must do.
On Saturday, a constituent, a friend of mine in his 60s, said: "We cannot go on like this." He was referring to traffic growth. He is right—we cannot. At 6 pm, outside the House, anybody trying to cross the road through the fumes could do so easily because the traffic is at a standstill. We cannot go on like that, in London or in Leicestershire.
Some people in villages such as those in my constituency will always have to drive. I am not anti-car as such. My hon. Friend the Minister has been quoted—I hope correctly—as having a love affair with the car.I urge him, if not to have a divorce, at least perhaps to cool his ardour. I look forward to being able to take public transport around my large, semi-rural constituency. I hope to see hon. Members using public transport to get to Westminster. We must change our attitudes. Perhaps we need to allow a little more time for travelling.
In conclusion, I urge my hon. Friend to tackle this huge problem of traffic growth before it overwhelms us all, as it is beginning to overwhelm my constituents in Blaby and in constituencies across the country.

The Minister for Roads and Traffic(Mr. Robert Key): Because my hon. Friend the Member for Blaby (Mr. Robathan) has spoken with such good sense tonight, we can all be sure that it will not be reported in the national media and press tomorrow.
I congratulate my hon. Friend on securing this Adjournment debate. He has raised a number of extremely important issues, and I would find it difficult to argue against most of his propositions. His constituents can rest assured that their Member of Parliament means what he says and carries out his word.
As it happens, I have a copy of the Leicester Mercury of Saturday 16 October 1993. The headline is: "Bridge battle will go to Parliament". It has, and here it is. My hon. Friend has brought the battle here, as he said he would. In the journal, there is a photograph of my hon. Friend with a large number of people who were showing him exactly what they meant about the issue of footpaths.
I know that I will not have time to answer all the points raised by my hon. Friend, but I undertake to write to him on the detail. I shall concentrate on his major proposition, which is that we need a new approach to transport and the car in this country.
Of course he is right, and that is happening, although one may be forgiven for not realising that from reading what is written in the press by the various environmental and some of the motoring correspondents, who seem not to listen to this sort of debate. In such debates, Members of Parliament and Ministers can sort out a few of the controversial issues of the day.
My hon. Friend talked about the growth in traffic. He is absolutely right. In December, we announced a review of the methodology of traffic forecasting. For some time, I

have not been convinced that we had it right, so we are looking at that with the help of outside, independent experts.
Hon. Members may say that that is clearly meant to be a cover-up—that we just change the statistics. As someone who taught economics for 16 years before entering the House, I know that George Bernard Shaw said:
If you laid all the economists in the world end to end, they would not reach a conclusion.
My hon. Friend then listed a number of important and practical points which concerned his constituents—for example, noise. Noise can be so intrusive. I happen to live next to a major road. I find it rather more quiet in my tiny flat in central London than in the pastures of Wiltshire, and the reason is traffic noise.
My hon. Friend was generous to point out that my Department is providing a great deal of screening from traffic noise. We are doing more. We are making enormous technological and engineering progress—for example, in new kinds of concrete surfaces. I am not talking about those terrible road surfaces that roar all night across the country; I am talking about whisper concrete technology and porous asphalt technology, which is coming on apace. Therefore, we can tackle noise to some extent.
Clearly, pollution also extends to emission pollution. My right hon. and learned Friend the Chancellor of the Exchequer, with his policy on fuel duties, has given a long-term signal of the direction in which we mean to move here. My hon. Friend referred to sustainable development. That is very important. The Department of Transport was a major player in my right hon. Friend the Prime Minister's launch of our sustainable development policy a little while ago.
My hon. Friend also referred to asthma, which afflicts so many people. My right hon. Friend the Secretary of State for Health has established a working group on that, which expects to report in the first half of this year on asthma and traffic. A number of other reports have been made, which of course I have seen.
My hon. Friend also mentioned light pollution. I could not agree with him more. One of the most distressing things about the countryside now is the way in which it tends to be lighted by roads. But good news is at hand. Only last year, I published a good lighting guide for transport engineers, which points out that new lighting technology has improved the situation dramatically. Spillage of light from roads will be minimised—we will never get rid of it completely. Light on our major motorways and trunk roads is important for safety, but I am at one with my hon. Friend on the distress which light pollution can cause in the countryside.
I am looking urgently at the deep problems which affect transport in this country. For example, we must look at the motives for travel. Obviously, freight is a prime motive for any kind of transport in different modes, as is commerce and business. Leisure and pleasure are increasingly important motives for use of different modes of transport. They are important, because 90 per cent. of our journeys and freight travel by road, yet 40 per cent. of my Department's budget is spent on public transport subsidy, and quite right too.
Nevertheless, we must discuss the motives for travel, and we must address fairly and squarely issues such as demand management. That means different things to different people. To some it means marginal cost pricing. I feel strongly about that. I have thought it odd for many


years that we priced marginally the cost of a journey by train, plane, taxi or bus, but not by motor car or goods vehicle.
There is also the question of integrating planning with our transport, which is a part of demand management. Urban congestion, charging and road pricing are also involved. Of course, the management of demand can also refer to the management of the consequences of demand, and that is different. The consequences of demand include the congestion and pollution to which my hon. Friend referred. We must address also the important issues, such as whether it is the number of cars or the number in use at any one time.
We must do much research with the motor industry, which is concerned that the number of vehicles will fall in the coming years. That would be bad for employment in this country. The Government are often criticised for our failure to achieve long-term planning. The current roads programme was envisaged and detailed in 1989 in a White Paper.
My right hon. Friend the Secretary of State and I have been engaged since August last year in a prioritisation review of the road programme in this country. One of the motives for that is the establishment of the Highways Agency, which will be up and running from 5 April and will be charged with our road programme and the planning and maintenance which eats up such a substantial and growing part of the roads budget.
That will leave Ministers with rather more time to concentrate on proper integrated transport policies. Of course, it is right that we should encourage the use of modes of transport other than motor car. We must also recognise that the car will be with us for a long time.
My hon. Friend may be interested to know that this afternoon I was the co-chairman of the Greener Motoring Forum, which was established by my hon. Friend the Minister for the Environment and Countryside. The forum had representatives from car manufacturers, motoring organisations, local authorities and a number of other people who are interested in the future of transport in this country. That included the Department of Trade and

Industry, because we do not build roads for fun. We build roads, and improve and maintain them, to ensure the economic prosperity of this country.
My hon. Friend said in the Leicester Mercury  on 16 October 1993—I am sure that he remembers it as if it were yesterday—that, if we are to have roads, we must take account of the people who already live near them and their ancient rights of way.
My hon. Friend mentioned the Grand Union canal and the dismantled railway that traverses his constituency in the area of Glen Parva. I have so much sympathy for his constituent who described what the area was like some years ago.
I am sorry that we were not able to accept the Glen Parva bypass for transport supplementary grant in 1994–95. Competition for funds was fierce this year, particularly as it has been necessary to reduce funding for local transport infrastructure by 15 per cent. Even more rigorous scrutiny of local authority bids than usual was warranted in the light of the current economic climate. The decision letter to Leicestershire county council included some detailed advice on bidding for funding for new major schemes in the context of the package bids for funding in urban areas.
I know that I shall have to end on this note, Madam Deputy Speaker. Package bids are a new feature of our transport supplementary grant. It means that we can invite local authorities to put together integrated transport bids that give proper attention not only to the motor car, to roads and to the quality of life of people who live beside roads as well as those who use them, but to cyclists and to pedestrians.
I shall shortly announce a new Government cycling policy. I am not sure that we have ever had one, but it is high time that we did. Also, we shall encourage local authorities in those package bids to bid for pedestrianisation schemes, which will add so much to the quality of life.
The Department of Transport is accused of many things. It cannot be accused of failing to look forward with optimism and realism to the needs of the next century. It is a demanding challenge, and one which I accept. I am grateful to my hon. Friend for allowing me to air some of the arguments tonight.

Question put and agreed to.

Adjourned accordingly at five minutes past Eleven o'clock.